Friday, April 20, 2018

Can Maturation be Slowed Down for Extra-Old Whiskeys?

Deep inside Buffalo Trace's perfectly innocuous Warehouse P is
 an unexpected sight, a huge silver door. What could it be?
Let's have a look, shall we?

What's this? Whiskey barrels? In a giant refrigerator?

What happens when you age whiskey for more than about 15-years in a conventional Kentucky warehouse? Most of it goes to heaven. When distilleries harvest their oldest barrels, many come out dry. The rest contain a mere fraction of what went into them originally.

But what is left often can be sold for hundreds, even thousands of dollars a bottle.

It is no secret that barrels for products such as Pappy Van Winkle Bourbon come from the lowest, coolest parts of the warehouse, where they age slowly. In Scotland, some whiskeys are aged for 50 or 60 years, to great acclaim. Scotland is a much cooler climate than Kentucky. What if you could change that? Such as by storing barrels in a warehouse that is held, year-round, at a constant temperature of 45℉?

It is just an experiment now, but the new refrigerated warehouse at Buffalo Trace can hold about 400 barrels. Some of the barrels in it now already have a few years on them, others are newly filled.

Forty-five degrees is pretty chilly, and keeping the temperature constant means there is no cycling, the heating and cooling process that keeps liquid moving through the wood, where it picks up sugars and other goodies. What if, at 45℉, nothing happens? "Then we'll try 50℉," says Sazerac CEO Mark Brown (pictured).

Research conducted elsewhere on the Buffalo Trace campus, at the experimental Warehouse X, has shown that the temperature in an unheated Kentucky warehouse can range from -5℉ to 105℉ over the course of the year. All of the new warehouses Buffalo Trace is building are insulated and heated. In Warehouse P, they're going the other way, holding the maturation process back as much as possible.

Imagine a 50-year-old bourbon.

Monday, April 9, 2018

Don’t Worry Too Much About Those Whiskey Tariffs

Rest easy, little darlings. Rest easy.
Unwelcome as it is, China’s tariff on American whiskey won’t cause much damage.

Exports are important to America's whiskey producers. The United States exported $1.63 billion worth of distilled spirits products last year, most of it whiskey, most of it from Kentucky and Tennessee.

Less than $9 million of that came from China.

Naturally, whiskey producers would be happier with no tariffs. They would rather hear that China has dropped its existing 10 percent tariff on imported whiskey and opened up even more. China is a vast and largely untapped market for imported luxury goods such as whiskey. The industry has been talking about it for more than a decade, but not much has happened. A brief Cognac boom was stifled by President Xi Jinping’s anti-corruption drive. China's domestic spirits industry is booming.

This budding trade war certainly won’t help American whiskey producers, but Kentucky will feel more pain from the soybean tariff.

Much more significant for whiskey producers would be retaliatory tariffs by Canada, the United Kingdom and the European Union. Canada is the biggest foreign market for American spirits at $198.2 million in 2017. Throw in our other NAFTA partner, Mexico (#9), and it’s $242.8 million. The U.K. is ranked second at $177.9 million. The five largest E.U. countries combined contribute $452.1 million a year. Those three trading blocks alone account for more than half of U.S. export income from spirits.

Pressure on sales to those places will hurt and hurt right away.

But even there, with supplies as tight as they have been these last few years, some easing of export growth might be welcome, at least in the short term. It would give producers some breathing space and allow them to build up inventories and pay a little more attention to the domestic market. It might lead to better retail availability at home and maybe even some price moderation, both of which would be welcomed by American whiskey enthusiasts, if not by producers. Isn’t that what ‘America First’ is supposed to mean, after all?

Longer term, and across the whole economy, tariffs and trade wars are mostly bad. The hit will fall hardest on American consumers but many U.S. businesses will suffer. Many Americans will lose their jobs. For producers and consumers, the United States always does best in open markets. That is an opinion, of course. You may consider me a free trader.

The desirability of open markets is even more clear with bourbon whiskey and Tennessee whiskey, because they must be made in the United States. They are products the world wants and wants now. We can’t miss our moment. Anything that makes it harder to satisfy worldwide demand for American whiskey is bad.

But if there are tariffs, we will deal with them, and try to make the best of it. When life hands you a lemon, you might as well make a whiskey sour.

Thursday, April 5, 2018

After 30 Years, the Photographs of Ray Flerlage Are Right Where They Belong

Me and Ray in 2000. Photograph by Marc Pokempner for the Chicago Reader.
My personal history with the photographer Ray Flerlage began 30 years ago at the Chicago History Museum (CHM). I was doing photo research for Donna Lawrence Productions and thought CHM would have a big collection of blues photos. They didn't. "You want Ray Flerlage for that," the archivist told me.

I called Flerlage. At first he wasn't cooperative. I learned later that he was depressed. I persisted and it turned out the attention and interest in his photographs was exactly what he needed. His renewed enthusiasm about his own work led, in 2000, to publication of his book of photographs and remembrances, Chicago Blues as Seen from the Inside. Lisa Day, a renowned film editor ('Stop Making Sense,' 'Hail, Hail Rock 'n' Roll'), discovered Ray's work while editing Martin Scorsese's Eric Clapton film, 'Nothing But the Blues.' Day was the driving force in getting Ray's book published.

My smaller contribution was with my own 1995 book, Blues Legends, which also featured Ray's photographs extensively.

With publication of his book, Ray learned that he had inspired an entire generation of young photographers, including Marc Pokempner, who took the one above. Ray had mobility issues and didn't like to receive guests at his South Side home, so I generally took him wherever he needed to go, such as book signings. For interviews he liked Valois, a modest Hyde Park restaurant also favored by President Obama.

Ray died in 2002. His wife, Luise, died one month later. Her nephew was responsible for the estate. I made some suggestions about the collection (the Smithsonian was interested), but eventually lost contact with him. Recently, I was delighted to learn that, in 2016, CHM acquired the entire collection of 45,000 images, shot from the late 50s through the early 70s, as well as Ray's papers. Sometimes things work out exactly as they should.

This coming Saturday, the museum’s first full-scale Chicago blues exhibit, 'Amplified,' will open and it is built around Ray's photographs. Joy Bivins is the curator. (The Chicago Tribune has a preview here.)

Tuesday, April 3, 2018

MGP: 100% of Our Electricity Will Come from Wind

The production of whiskey and other distilled spirits has a significant impact on the environment. Distilleries use a lot of water and energy, and generate a considerable amount of waste. Environmental sustainability is a constant challenge for producers.

MGP is a leading U.S. supplier of premium distilled spirits and specialty wheat proteins and starches, best known by readers of this space for its whiskey distillery in Lawrenceburg, Indiana. MGP has embarked on a major renewable energy initiative, to source 100% of its electricity needs from renewable wind power, which is abundant in MGP's home state of Kansas.

“We are proud and excited to enter into this agreement, which represents a significant step in our efforts to realize both the direct and overarching benefits of renewable energy technologies,” says MGP President and CEO Gus Griffin. “Among these is our ability to take on a more prominent and proactive role in further supporting environmental sustainability through greater use of clean energy. This initiative is consistent with the long-term view we take for our business, and reflects our enduring commitment to our communities and social responsibility.”

The three-year agreement is with Westar Wind, a Green-e certified program offered by Westar Energy. As a result, total electric usage at MGP’s facilities in Atchison, Kansas, and Lawrenceburg, Indiana, will be offset by green energy provided by Westar’s wind resources in Kansas.

Under the agreement, which can be renewed at the end of three years, MGP will purchase renewable energy credits from Westar. Wind energy equal in value to the credits will then be sourced from wind farms in Kansas and added to the overall energy grid system. This arrangement makes MGP the largest Westar customer to commit to 100 percent renewable electric energy.

“Westar applauds MGP for its commitment to the environment and social responsibility,” Jeff Beasley, vice president, customer care, said. “It’s great to provide Kansas’ wind energy to help our customers reach their sustainability goals, even reaching beyond Kansas.”

As a Green-e certified program, Westar Wind is committed to delivering reliable, affordable, safe and clean energy to consumers. Green e Energy is the nation’s leading certification program for renewable energy. For nearly two decades, Green e Energy has provided oversight for voluntary renewable energy transactions in North America.

Thursday, March 22, 2018

Coming Soon, Whiskey at Walmart in Texas

The 21st Amendment to the Constitution, which repealed Prohibition, gave the states unusual authority to regulate alcohol as they see fit. Although in most ways U.S. law operates to create an 'open market' within the United States, it is different with alcohol. On top of complying with federal law, producers have to navigate through a confusing web of 50 state regulatory schemes. Chain retailers who sell alcohol (or want to) face similar challenges.

Because updating alcohol legislation is always fraught, most of these schemes have changed little since they were first put in place 85 years ago.

Peculiarities abound. In Indiana, only liquor stores can sell cold beer. In Utah, bartenders have to conceal their drink preparations from underage eyes. Some states still prohibit alcohol sales on Sunday.

In Texas, only individuals and privately-owned corporations can get retail licenses to sell distilled spirits. Publicly-owned corporations such as Walmart cannot. Texas is the only state that bars public corporations from selling liquor solely because of their status as public corporations.

That will change if the decision of a U.S. District Court sitting in Austin is upheld. It ruled that the public company ban and some other restrictions are unconstitutional. The decision, filed on Tuesday, won't go into effect until all appeals have been exhausted, or in 60 days, whichever comes first.

The defendants in the suit are the Texas Alcoholic Beverage Commission (TABC) and the Texas Package Stores Association (TPSA). The TPSA is the trade association of Texas package stores. It only accepts applications from package stores that are majority-owned by Texans.

As reported by ABC News, the CEO of the TPSA, Lance Lively, had this to say about the ruling: "The Texas Legislature put a system in place to ensure safe access to alcoholic beverages in Texas, and that system has worked for over 80 years. We will appeal the trial court's decision and continue to fight for family-owned liquor store owners against the world's largest corporate entities that seek to inflate their profits by upending sensible state laws that protect both consumers and small businesses."

In business, the only profits that are ever 'inflated' are the other guy's.

Consumers, of course, are expected to benefit from the competition Walmart and other national chain retailers will bring to the Texas market.

If you think this rule exists to keep liquor retailing a 'mom and pop' business, think again. Out of a total of 2,578 active package store permits issued by TABC, 574 are owned by a package store chain (meaning, a business holding six or more package store permits). There are now 21 such chains operating in the state. The largest, Spec’s, holds 158 permits. Since 1944, the chains have greatly increased their number of stores and volume of sales, even as the total number of package stores has stayed approximately the same. The four largest chains control about 60 percent of the market.

Is anybody in Texas crying because Specs and Gabriel's may have to compete with Walmart?

Walmart did not challenge the law that will require them to build separate liquor stores next to their existing stores. They already do this in other states that have the same requirement.

The decision describes a legal tug-of-war that has been going on since the early 1990s, in which the TPSA keeps trying to limit retail distilled spirits licenses to Texans only. That triggers what is known as the dormant Commerce Clause, which says that if Congress has the power to regulate commerce among the states, then the states lack the power to impede interstate commerce with their own regulations.

Because of the 21st Amendment, state liquor laws are a little bit different but they aren't that different. The court concluded that the sole purpose of the ban was to protect Texas package store owners from out-of-state competition, which is unconstitutional.

In its arguments, TPSA was really grasping at straws. They conceded that allowing in Walmart and other national chains would lower prices for consumers, then they argued that this is a bad thing because lower prices encourage more consumption leading to more liver disease, heart disease, strokes, and cancer, and numerous other social ills such as drinking and driving, child and spousal abuse, homicides, and suicides.

Yes, consumers, our high prices are actually good for you. (But we're not inflating our profits.)

Texans, unlike most people in most other states, are fiercely loyal to their in-state champions. Texans love all things Texas. I get that and I think it's beautiful, but you gave up some of your independence when you joined the United States in 1845, a decision I know some of you now regret.

Tuesday, March 20, 2018

Does Bourbon’s Shadow Threaten Its Future?

Baudoinia compniacensis covers an aging warehouse in Cognac.

It looks like a shadow and is casting a pall over the otherwise brilliant revival of American whiskey in the 21st century.

Tourists find it an amusing curiosity. Producers decline to talk about it. Distillery neighbors call it a nuisance and worse. There have been government actions and civil lawsuits.

Nobody knows what to do about it.

‘It’ is baudoinia compniacensis, more commonly called the ‘whiskey fungus.’ It looks like dirt. The black mold can be found clinging to the outer walls of whiskey warehouses in Kentucky, Tennessee, Canada, Scotland, Ireland, Japan, etc. It was first observed in France, in Cognac, more than 150 years ago.

Cognac wears it proudly as an ensign of prosperity. In other places it is less esteemed.

In the new issue of The Bourbon Country Reader (and the next one), we take a deep dive into all things baudoinia, the history of its discovery, the current state of scientific knowledge, and how it may be affecting the ability of American whiskey-makers and other spirits producers to take full advantage of the recent, ongoing spectacular growth in the popularity of spirits, especially American whiskey.

Baudoinia is a potential threat to all producers of barrel-aged spirits, from the largest to the smallest.

Although there is no evidence that baudoinia is a health threat, and a great deal of evidence that it is not, these days it takes more than facts to keep people from claiming all sorts of dangers.

Current Reader subscribers should receive their copies of the new issue in the next few days. New subscribers can get on the bandwagon by clicking here.

Founded in 1994, The Bourbon Country Reader is the oldest publication devoted entirely to American whiskey. It is a charming mix of news, history, analysis, and product reviews. Do you worry that advertising spending influences coverage in other publications? No chance of that here since The Bourbon Country Reader is 100 percent reader-supported. It accepts no advertising.

To experience The Bourbon Country Reader for yourself, you need to subscribe. Honoring history, The Bourbon Country Reader still comes to you exclusively on paper, in an envelope, via the USPS.

A subscription to The Bourbon Country Reader is still just $20 per year for addresses in the USA, $25 for everyone else. The Bourbon Country Reader is published six times a year, more-or-less, but your subscription always includes six issues no matter how long it takes.

Click here to subscribe with PayPal or any major credit card, or for more information. Click here for a free sample issue (in PDF format). Click here to open or download the free PDF document, "The Bourbon Country Reader Issue Contents in Chronological Order." (It's like an index.)

If you want to catch up on what you've missed, bound back issue volumes are available for $20 each, or three for $50. Each volume contains six issues. That's here too.

If you prefer to pay by check, make it payable to Made and Bottled in Kentucky, and mail it to Made and Bottled in Kentucky, 3712 N. Broadway, PMB 298, Chicago, IL 60613-4198. Checks drawn on U.S. banks only, please.

Go ahead and subscribe. It's fungus!

Thursday, March 15, 2018

What Is Sazerac Doing in Tennessee?

A rendering of Sazerac's proposed Tennessee whiskey distillery in Murfreesboro.
Last fall, Sazerac announced its interest in a 55-acre parcel of land in Murfreesboro, Tennessee, on which to build a new Tennessee whiskey distillery. Nothing was said at the time about how this might affect Sazerac's existing distillery in Newport, Tennessee, where distillers John Lunn and Allisa Henley have been making Tennessee whiskey since last June. On March 1, USA Today reported that even as Sazerac's plan works its way toward approval by the city council, local residents are up in arms about traffic, industrial zoning so close to residential, and the dreaded 'whiskey fungus.'

But that isn't what caught my eye in the article. Baudoinia compniacensis will always be with us. What struck me was this: "Sazerac will relocate its Tennessee operations from Newport in East Tennessee." The article doesn't identify a source for that claim, and Sazerac says its plans for Newport are not finalized, so they won't comment.

'Newport' is the distillery formerly known as Popcorn Sutton. At the very end of 2016, Sazerac bought the distillery but not the Sutton brand, nor any of the spirit made there up to that point. Popcorn Sutton was a notorious moonshiner who died in 2009. Shortly after his death, his widow and one of his buddies launched a legal distilling venture in Sutton's name. In 2013, it was acquired by Mark and Megan Kvamme. He is a successful venture capitalist, close to Ohio Governor John Kasich. She became Popcorn Sutton Distilling's new CEO. The Kvammes still own the brand, which appears to be quiescent.

The Kvammes poured a lot of money into building a new distillery in Newport, near Sutton's home, and also not far from Gatlinburg and other Smoky Mountains attractions. The place is big, 50,000 square feet. The three solid copper pot stills are true alembics (no rectification section), built by Vendome. The two beer stills are 2,500 gallons each. The spirit still is 1,500 gallons. The operation also includes a 5,000-gallon mash cooker, three 10,000-gallon fermenters, and a small bottling line.

The Kvammes scored their biggest coup in 2015 when they hired John Lunn and Allisa Henley away from Diageo's George Dickel Distillery to run the place. When Sazerac bought it, they kept Lunn, Henley and their crew in place. After a few months of planning and experimentation, Lunn and Henley began production of a Tennessee whiskey of their own creation.

Then came the Murfreesboro announcement. Nothing was said about Newport, but USA Today in its recent reporting says Henley will run the Murfreesboro operation.

What Sazerac seems to be doing is logical. Newport only made sense when the distillery was all about the legend of Popcorn Sutton. That remote location might be good for tourism, but without Sutton there is no obvious tourism hook. Sazerac doesn't want to make 'moonshine.' They want to make regular, bourbon-like Tennessee whiskey to compete with Jack Daniel's and George Dickel. Murfreesboro is close to Nashville and the home of Middle Tennessee State University. It is reputed to be a great place to live and will be an easy stop for tourists on the way to visit Jack and George.

Stay tuned.

Sunday, March 4, 2018

Remembering a Family Champion

When Booker Noe, Jim Beam’s grandson, retired as Beam's master distiller and became a brand ambassador for the company, the image makers seemed to decide there were no Beams except for Jim Beam and his descendants.

They found their plan stymied by a tiny woman filled with family pride. She was Jo Ann Beam, daughter of Harry Beam, and granddaughter of Joseph L. ‘Joe’ Beam.

The Beams were prominent Kentucky whiskey-makers even before Joe and Jim came along, and there are other whiskey-making branches too.

Jim Beam had one son, Jeremiah, who joined him in the business but was not a distiller. He had no children. Booker was the son of Jim Beam's daughter, Margaret.

Joe Beam had seven sons who all became distillers, touching nearly every company in the industry. Jo Ann Beam’s father, Harry, was the youngest of the seven brothers. Although not a distiller herself, Jo Beam made Beam whiskey for 38 years as a bottling line worker at the James B. Beam Distillery in Clermont, Kentucky. After she retired in 1995, she devoted herself to serving as a volunteer at the Oscar Getz Museum of Whiskey History in Bardstown, and to researching her family’s heritage. She especially championed the ‘forgotten history’ of her grandfather, father, and uncles.

Rifling through the attics and basements of her relatives, Jo uncovered rare bottles, hand-written bourbon recipes, and other priceless objects associated with all of the whiskey-making Beams. Many of her finds are now on display at the Oscar Getz Museum. She compiled two books of Beam family press clippings, personal documents, and family tree diagrams.

I got to know 'Aunt Jo' during the last few years of her life. She generously shared her research and stories, and took great delight in doing so. She was funny, salty, boisterous, irreverent, all of my favorite qualities. In 2001, Malt Advocate Magazine (now known as Whisky Advocate), published an article by me about the Beam family, prominently featuring Aunt Jo's 'forgotten Beams.' She was thrilled and showered me with praise, but the real credit belonged to her.

In 2002, Jo Beam achieved some notoriety when she and her twin sister, Jean Hall, appeared on national television in the two-hour History Channel documentary, “Rumrunners, Moonshiners and
Bootleggers.” In a segment near the end of the program they revealed that their father, Harry Beam, was caught making illegal liquor in 1949. They were teenagers and remembered the bust vividly.

The incident had long been an open secret in the community, but never admitted to. When it happened their grandmother used her influence (and $1,000) to keep it out of the newspapers.

No family is more important to the heritage of whiskey in the USA than the Beams, and no one did more to preserve that legacy than Aunt Jo. Next week, on her 85th birthday, join me in a silent tribute and toast.

Wednesday, February 28, 2018

Hoosiers May Now Buy Liquor on Sunday

This Sunday, for the first time ever, Indiana's liquor stores will be open for business. Indiana becomes the 41st state to allow Sunday liquor sales, according to the Distilled Spirits Council.

You might expect liquor store owners to celebrate the change, but they won't. Such is the peculiarity of politics in the highly-regulated world of alcohol.

Consumers, of course, almost universally favor Sunday sales. Those with religious objections are mainly the ones who don't. Also unhappy about the change are liquor retailers in Illinois, Michigan, Ohio, and Kentucky who enjoyed a little extra business on Sundays from thirsty Hoosiers.

So why did Indiana liquor store owners oppose the change? Let's call it unenlightened self-interest. Enlightened self-interest would dictate that, as a retailer, I should favor anything my customers favor. That is the essence of a customers-first business philosophy, isn't it?

Most Indiana liquor store owners didn't see it that way. Naturally, the new Sunday sales law applies to every type of retailer licensed to sell alcohol, which includes supermarkets, drug stores, convenience stores, etc. (Alcohol by-the-drink in bars and restaurants has been legal for many years.) It is expensive for a liquor store, normally closed on Sunday, to open for an additional day, whereas those other stores are already open on Sunday. Their additional cost to sell liquor on Sunday is minimal.

Indiana's liquor store interests spent at least $150,000 lobbying state lawmakers in recent years, on this and other issues, and have donated more than $750,000 to those lawmakers since 2010, according to research by the Associated Press.

One privilege retained by liquor stores is the sale of cold beer. Indiana is the only state that regulates beer sales by temperature. In Indiana, only liquor stores can sell cold beer.

And now they can sell it on Sunday.

Sunday, February 18, 2018

Here Is What You Need to Know About WNS

For the last ten years, I have been trying to raise awareness about Whiskirexia Nervosa Syndrome, or WNS.

WNS is a whiskey buying disorder characterized by a false whiskey inventory image and an obsessive fear of running out of whiskey. Individuals with WNS tend to already own more whiskey than they can ever drink, even as they continue to buy more. News about whiskey shortages and out-of-stocks aggravates the condition, leading to imprudent case lot purchases. Persons with WNS have been known to empty store shelves of particular products they fear will soon be scarce, thereby producing the very scarcity they dread.

A typical WNS sufferer can be told repeatedly that he or she (although most sufferers are men) has plenty of whiskey, really more than enough, by persons who they ordinarily trust, and they may even in moments of clarity acknowledge that fact intellectually, but still they can't stop buying.

Many marriages are at risk.

Whiskey manufacturers have not addressed the problem. Instead they release more and more line extensions and new brands, more than ever before. New producers are proliferating. WNS, which had only a few sufferers when my campaign began a decade ago, has reached epidemic proportions.

As WNS takes hold, sufferers tend to seek comfort from other similarly afflicted individuals, but rather than supporting recovery, these groups tend to enable the condition.

What can you do? If you do not have WNS yourself, find someone who does. Help them drink their whiskey. It's the least you can do.

Wednesday, February 14, 2018

Do You Have a National Distillers Dusty?

Jim Beam Brands Co. recommended Bourbon Section shelf set for 1989-90.
Start talking about old whiskeys and pretty soon someone will mention National Distillers, usually in the context of Old Grand-Dad Bourbon or Old Overholt Rye. But National had a lot of bourbon brands including Old Crow, Old Taylor, Bourbon DeLuxe, Bellows, and other regional cats-and-dogs.

In 1987, the James B. Beam Distilling Company, a subsidiary of American Brands Inc., acquired the spirits division of the National Distillers and Chemical Corporation for $545 million. Included were three Kentucky distilleries, two of which were still active, although Beam immediately shut them down. The sale also included a lot of aging whiskey stock, at a time when American whiskey sales were in the doldrums and everyone had too much, what we call today 'the glut era.'

Enthusiasts of National Distillers whiskeys distilled before 1987 are constantly trying to figure out if bottles they have are National-distilled or Beam-distilled. It isn't easy, but some context might help.

One of the costs in whiskey-making is the cost of moving whiskey around while it is in the barrel. In a perfect world whiskey is barreled at the distillery and the barrel is moved to a nearby warehouse where it remains undisturbed until it is withdrawn years later for bottling, also nearby.

The point is that Beam's determination as to what whiskey went into what bottle was based primarily on the location of the whiskey to be bottled and the location of the bottling plant to be used. After the National acquisition, Beam bottled whiskey at two locations, its existing Jim Beam Distillery at Clermont, Kentucky, and what had been National's Old Grand-Dad Distillery at Forks of the Elkorn just outside of Frankfort.

In those days, the same bottling crew spent a few days at Clermont, followed by a couple at Frankfort. They did that because it is cheaper to move people than whiskey. The whiskey distilled by National was aging at the distillery where it was made, either Old Grand-Dad or Old Crow, which was also in the Frankfort area. Some of the whiskey distilled at Old Crow was aging in warehouses at Old Taylor, right next door. Some Beam-distilled whiskey was sent to Frankfort to age, but little if any went in the other direction.

To this day, those are Beam Suntory's two bottling plants. Each one has been substantially upgraded over the years. They run full time now and have their own crews, but the fact remains that what is aged at Frankfort is bottled at Frankfort and what is aged at Clermont is bottled there. Beam Suntory's Maker's Mark has its own bottling plant at the distillery in Loretto. The company's largest Kentucky distillery, Booker Noe at Boston, has warehouses but no bottling. Whiskey aged there is bottled at Clermont.

For reference, the distance between the Clermont and Booker Noe plants is about ten miles. The distance from either of them to Frankfort is about 75 miles. Beam has several other maturation facilities but most of them are close to Clermont, not Frankfort. Consequently, most of the whiskey bottling happens at Clermont. Frankfort bottles other things, such as DeKuyper liqueurs.

After Beam stopped distilling at Frankfort, it started to make the high-rye Old Grand-Dad recipe at Clermont, so Old Grand-Dad would have been bottled at Frankfort until the Frankfort-distilled Grand-Dad ran out, and thereafter it was bottled at Clermont. For everything else, Beam used Frankfort-distilled and Clermont-distilled whiskey interchangeably, without regard to brand, depending on where it was being bottled. This was even true of Old Overholt, as Jim Beam has always made rye whiskey in addition to bourbon.

Nothing has been distilled in Frankfort since 1987 so everything in those warehouses now comes from either Booker Noe or Clermont, but if it is aging in Frankfort it will almost certainly be bottled there too.

I know more about the period following the National acquisition than most people because I was in the room for some of it. Two years after the acquisition, Beam was still struggling to integrate the two product portfolios. I was part of a team that developed the document above, a comprehensive manual for off-premise retail merchandising of the combined Beam-National line.

The manual explained the principles of effective merchandising and where to place each major Beam brand. It included advice like this:

"The Jim Beam shelf set should begin immediately to the right of the Jack Daniels set. Jim Beam White Label should be first, immediately to the right of Daniels. Place Jim Beam Black Label to the right of White Label. Place Beams Choice to the right of Black Label.

"The Old-Grand Dad set should be placed to the left of Daniels, with all three proofs on the shelf, from left to right: 86°, 100° and 114°. This is the ideal shelf position for Jim Beam's two most important bourbon brands."

That's right. In 1989-90, Old Grand-Dad was second only to Jim Beam in importance in Beam's portfolio. That is because Old Grand-Dad still commanded a premium price and was, therefore, one of the most profitable brands on the market.

No one then could have predicted how different the bourbon landscape would look 30 years later.

Friday, February 9, 2018

"Bond. Bottled-in-Bond"

If the only Bond you know is James, you're not alone. Once considered the epitome of 'the good stuff' in American whiskey, the 'bonded' or 'bottled-in-bond' (BIB) designation fell into disuse. Old Grand-Dad Bonded, the best-selling bond for many years, was one of the few nationally-distributed bonded whiskeys that remained. Heaven Hill had a stable of inexpensive bonds (Heaven Hill, J.T.S. Brown, J.W. Dant, T. W. Samuels) sold primarily in Kentucky. Sazerac's Very Old Barton, another mostly-in-Kentucky brand, had a bonded expression. Old Fitzgerald Bottled-in-Bond (the green label) was also available here and there.

But bottled-in-bond is back in a big way. Beam Suntory, which makes OGD Bonded, has recently introduced Jim Beam and Old Overholt BIB expressions. Brown-Forman has launched bonded versions of Old Forester and Early Times. Heaven Hill has a super premium bond in Henry McKenna. They also make Mellow Corn, the only bonded corn whiskey on the market, and Rittenhouse, the top-selling bonded rye.

Recently, several micro-distilleries have introduced bonds as a way to proclaim, "Look! We actually have whiskey that is more than four years old." They include Kings County, Laws Whiskey House, Mountain Laurel Spirits, FEW Spirits, and Tom’s Foolery. Typically these are limited releases, some sold only at the distillery.

What does 'bottled-in-bond' mean? Its roots are an 1897 Federal law called the Bottled-in-Bond Act. It was America's first 'truth in labeling' legislation. In return for allowing the Federal Government to monitor their operations and adhering to a strict set of rules, producers could label their products 'bottled-in-bond,' which the government considered a guarantee of whiskey authenticity. Though guaranteeing quality per se was never the intention, it became that de facto.

The most obvious characteristic of a BIB is its proof, 100°, which means one-hundred degrees of proof, also known as 'full proof,' which is 50 percent alcohol, 50 percent water. Though essentially arbitrary, this was long believed to be the ideal alcohol concentration for a whiskey. Modern tastes seem to prefer a milder 40/60 mix, but bonds must be 50/50, no more, no less.

A bond must also be at least four years old but it can be older. The Henry McKenna Bond, for example, is 10-years-old.

The lesser known but more interesting characteristic of bonds is their singularity. A bond must be the product of a single distillery and a single distiller during a single distilling season. A 'distilling season' is a six-month period, either January-June (Spring) or July-December (Fall).

Think of bonds as 'single batch' whiskeys. The singularity rule means producers can't 'correct' a bottling batch by mixing in older or younger whiskey, or whiskey from another distillery. This makes barrel selection critical. If you really want to experience a distillery's house character, drink one of their bonds.

Although bottled-in-bond whiskeys were made and sold pre-Prohibition, it was only after the drought that they came into their own. Prohibition, the Great Depression, and World War II all kept the American whiskey industry from building up a solid stock of fully aged whiskeys for more than 25 years. In a market chock full of immature spirits, the words 'bottled-in-bond' became a Holy Grail in the late 40s and 50s, and into the early 60s. Then the whole American whiskey market crashed. Instead of being desirable, bonds came to be considered old-fashioned. One after another, major producers discontinued their bonds in favor of 80° proof expressions.

In today's crowded whiskey marketplace, new products are the easiest and surest way to grab attention. The long whiskey aging process makes it hard to develop products that are from-scratch new. For large producers especially, bonds are a way to create a new product from existing inventory. Bonds appeal to newbies and veterans alike. Truly, bonds are back but there is no way to know if they are here to stay.

Thursday, February 1, 2018

TTB Goes After Pay-to-Play

The principal Federal regulator for whiskey and other distilled spirits sold in the United States is the Treasury Department's Alcohol Tax and Trade Bureau. In this space, you often read about TTB's role in regulating labeling and marketing practices, but that is not all they do.

For fiscal years 2017 and 2018, Congress has given the TTB $5 million of specific funding for "the costs of programs to enforce trade practice violations of the Federal Alcohol Administration Act."  According to the TTB, trade practice investigations are extremely resource-intensive. They are conducted by investigators and auditors who must obtain evidence through field investigations involving interviews and analyses of business records, and significant attorney support from the Office of the Chief Counsel.

At the top of the TTB's trade practices agenda is pay-to-play.

In July 2017, TTB announced a joint investigation with Florida State Alcohol Authorities in the Miami area. In September it followed with a joint investigation with Illinois State Alcohol Authorities in Chicago, the Quad Cities, and Peoria.  Both investigations are focused on 'pay to play' schemes in which illegal 'slotting fees' are charged. A 'slotting fee' is a sum charged by a retailer which a producer pays to get a product into an account. Since slotting fees are illegal, they are off-the-books and made under the table.

In past trade practices investigations, the TTB has focused on two areas: 'slotting fee' payments for product placement and consignment sales for malt beverages (beer) in the context of 'freshness dating' returns.

Other examples of trade practice violations include Exclusive Outlet (Section 205(a)), Tied-house (Section 205(b)) with seven specific types of means to induce, and Commercial Bribery (Section 205(c)).

Friday, January 19, 2018

Pay Attention to Lux Row Distillers Right Now

Lux Row, the new bourbon distillery in Bardstown, Kentucky, set its first fermenters today. In a few days, that liquid will be distilled, entered into barrels, and placed in the new warehouse to age.

Lux Row is the first distillery for Luxco, a long-time non-distiller producer (NDP), and the seller of such bourbon brands as Ezra Brooks, Rebel Yell, Blood Oath, and David Nicholson. Announced in 2016, it is now open for business. Although nothing made at the new distillery will be available for purchase until 2022 or so, now is a good time to pay attention because Lux Row Distiller John Rempe and his team are documenting their progress on Facebook, Instagram, and their own web site.

As of today, they are transitioning from construction to production.

Luxco, which is based in St. Louis, has been selling bourbon, and a portfolio of other distilled spirits products, since 1958; as the David Sherman Company until 2006. For most of that time they were a regional company. About 20 years ago they acquired several minor but national bourbon brands. They have been building on that to become a significant player, especially in American whiskey. Rempe is their long-time blender, R&D, and quality control guy. He has moved to Bardstown where he retains those roles with the added responsibility of distiller.

When Lux Row claims to be 'family-owned,' they are talking about the Lux family, Luxco's owners.

As an NDP, Luxco purchases the whiskey it sells in bulk from distillers. They typically buy it long before they intend to sell it. As such, they have an aging inventory of about 50,000 barrels.

After 60 years as a successful NDP, Luxco decided to take the plunge and become a distiller because its usual suppliers could no longer provide enough whiskey for Luxco's needs. That is a testament to how robust the American whiskey industry is right now. Their intention is to make all of the whiskey for their four principal brands at Lux Row.

Although it is not yet open to the public, Lux Row/Luxco is a member of the Kentucky Distillers' Association and will be a stop on the official Kentucky Bourbon Trail.

Friday, January 12, 2018

Should You Decant Your Whiskey?

Doesn't that look nice? Sure, but does decanting do anything for the whiskey?

With some wine, decanting prepares the wine for serving. It does this in two ways. First, proper decanting keeps sediment in the bottle. Second, it aerates the wine. Neither is an issue with whiskey.

Because we call the second container a decanter, people tend to apply the wine analogy. Whiskey is more robust than wine. There is very little you can do to hurt it or help it. Decanting whiskey has no practical value.

So why decant whiskey? The sole reason is so you can serve it from an attractive decanter rather than a tacky bottle.

It is more about decorating than drinking, which is not to say decorating is a trivial thing.

To personalize this, I have a lot of whiskey around the house. Some of it is in cabinets but some is out in the open, in several different rooms, in bottles. Sometimes I wish I was the guy who keeps a nice decanter of fine bourbon on a silver tray with a few matching glasses, on a spiffy side table in my elegantly furnished sitting room. Maybe two decanters, the other one with the house cognac.

In my imagination it is a Victorian scene, but there are modern equivalents.

For better or worse, I am not that guy.

If you are that person, I salute you. I may not practice elegance, but I respect it. There is nothing wrong with decanting, but don't believe anyone who says it affects the whiskey one way or the other. It doesn't.

From a lifestyle perspective, maybe the way you enjoy whiskey (or any fine spirit) is to buy a bottle, drink it until it is gone, then buy another one of the same or different provenance. If you are that person, the decanter model works great for you. Again, there are times when I wish I was that person, but I'm not. If you are, God bless you. That is a perfectly fine way to be too.

So, to decant or not? As with most whiskey-related questions, the only right answer is to do what pleases you most.

Wednesday, January 10, 2018

Come Drink with Me in Peoria on Thursday, January 25

HopScotch is an adults-only evening to benefit the Peoria Playhouse Children's Museum in Peoria, Illinois. They invite a few of their favorite local restaurants and breweries to bring in signature whiskey cocktails and locally-crafted brews. The event also has live music, a silent auction, and hands-on activities. Food too.

I don't know how hands-on you'll want to get, but I am one of the activities. Holders of a VIP ticket can hang out with me in the VIP Whiskey Lounge and sample a selection of fine bourbons. My books will be available for sale and signing. I'll be there to pour the drinks and talk about all things American whiskey.

The whole event sounds like fun. "HopScotch is our annual adults-only event that helps us kick off the new year. The Cookery returns providing guests with savory and tasty selections while you explore the museum, participate in the activities, and make new friends. You will see Noir and Hearth again this year providing their delicious whiskey cocktails. We welcome Edge, Tannins and Hops, and Zion to this year's event and couldn't be more excited. Our beer presenters won't be outmatched and are offering several options for the beer lover. Half Acre has come back to play and new to the group are Destihl and Triptych. This year is going to top last year's event with the exciting auction."

Tickets are here.

About that auction, one of the items on offer will be this very bottle of Maker's Mark Private Select, Curmudgeons Edition.

This is from the barrel created by me and fellow writers Lew Bryson, Fred Minnick and Michael Dietsch last summer. We won't be pouring it in the Lounge, but you can bid on it in the Silent Auction. While it is not quite one-of-a-kind, you won't find it in any stores. You'll be the pride of Peoria if you place the winning bid.

Peoria, Illinois, and the nearby town of Pekin, were once whiskey producers on a scale that rivaled Kentucky. The infamous 19th century Whiskey Trust was based there. The town still produces a lot of ethanol. If you're in central Illinois, come say hello and benefit a worthy cause.

Monday, January 8, 2018

My Vintage Spirits Wish List

There is something new to do when you visit Kentucky, drink vintage spirits. Kentucky's Vintage Spirits Law is just a few days old, but I've been working on my personal wish list. These are all whiskeys I have had at some point and would like to have again.

Where I have indicated a label, that wording identifies the distillery where the whiskey I tasted was made, to distinguish it from other versions of that brand made at other distilleries.

"What is vintage?" is still a wide-open question, until the Kentucky Alcoholic Beverage Control Department issues some regulations. All they have released so far is the following, elaborating on the new law's notice provision.

"Effective January 1, 2018, a retail licensee selling vintage distilled spirits purchased from a non-licensed person must give the Department prior written notice of the proposed retail drink or package sale, which includes the following information:  (1) name and address of seller; (2) the quantity and name of the alcohol product being sold; (3) the date of the sale; and (4) name and license number of retail licensee."

I will here express again my hope that Kentucky will be truly conservative and regulate this trade as little as possible. So far so good. Let's hope they continue to let the market work its magic so millions of bottles now gathering dust in attics and basements can soon be liberated, freed to fulfill their noble destiny, all nice and legal like.

Back to my list. I believe these qualify as 'vintage.'

Antique Bourbon, Athertonville label
Henry McKenna Bourbon, Fairfield label
Very Very Old Fitzgerald 12-year-old
Old Fitzgerald Bottled-in-Bond, DSP-16
A. H. Hirsch Reserve Bourbon
Old Grand-Dad, Frankfort label
Parker's Heritage #6, a Blend of Mashbills
Evan Williams Single Barrel Vintage, 1994

Before anyone contacts me with offers to sell any of the whiskeys on my list, don't bother. Transactions between non-licensed people are still illegal everywhere. If, however, you are a licensed Kentucky retailer engaged in vintage spirits reselling, and you have any of the above to sell, let me know.

Although the word 'vintage' suggests age, there is nothing in the new law that requires the bottle to be old. Mainly, the product cannot now be available in Kentucky through normal channels.

My main interest is American straight whiskey, but Kentucky's new law encompasses all distilled spirits, so scotch, cognac, rum, Chartreuse; it's all in the game.

So much remains to be seen. This isn't just bars, remember, selling by the drink. Package stores may buy and resell whole bottles. Not every retailer will participate. Many will wait until the rules are clearer, but some will jump right in. Most of the risk is on them.

If you have some vintage spirits you might want to sell, is now the best time to liquidate your collection? Maybe, but probably not. If the whole thing goes bust (a possibility), now might be your only chance. Otherwise, it probably makes sense to at least put a toe in the water, if only to find out who is buying and how much they might be willing to pay. Pick a few bottles you can part with easily. Keep your gems in reserve.

If you do, please remember that the buyers are businesspeople. They expect to make a profit, so they will price the bottle they bought from you at price higher than what they paid you, possibly a lot higher. That's how it works. I regret that it is necessary to explain this but from experience I know it is.

I can't emphasize enough what a big deal this is, potentially. It could be huge. It might even be the first wave in the ultimate legalization of the entire secondary market.

Friday, January 5, 2018

The Roots of Jack Daniel's Lincoln County Process

On New Years Day, we answered once and for all the question "Is Jack Daniel's Bourbon?" There is more to the story, however, going back almost 200 years.

At the heart of the controversy is the 'Lincoln County Process,' in which new make distillate is passed through thick vats of sugar maple charcoal. Although the process is very old, the term 'Lincoln County Process' is of recent coinage, the 1950s, shortly before the Motlow family sold the company to Brown-Forman. Up until then, most people just called the practice 'leaching' or 'charcoal leaching.'

In the 19th century, it was common among Tennessee distillers to run their new make through sugar maple charcoal. For roughly the first half of that century, most whiskey was sold unaged, but improving the flavor of new make continued to seem like a good idea even after aging became the rule.

By the 1950s, Jack Daniel's was the only distillery in the United States still leaching. They wanted to talk about it in marketing because they thought it made their whiskey unique, but 'leaching' didn't sound very appetizing. The process needed a new name.

'Lincoln County Process' was derived from the term 'Lincoln County Whiskey.' From the early 1830s, Tennessee's Lincoln County was renowned as America’s most productive corn cultivation district.

Lincoln County was once much larger than it is now and included the Jack Daniel's Distillery in Lynchburg. Moore County, where Jack Daniel's is today, was established in 1871 from parts of Lincoln and three other counties.

Lincoln County's reputation for fine corn passed on to its whiskeys. Like Monongahela rye, the use of Lincoln County corn was a selling point for middle Tennessee whiskeys. Starting in 1866, distilleries and brokers advertised in newspapers their ‘Lincoln County whiskey,’ specifically to differentiate it from the Robertson County product, Tennessee’s other popular whiskey style, as well as from Kentucky bourbon and other regional whiskeys.

During the early 1900s, the Jack Daniel's label stated ‘Jack Daniel's Pure Lincoln County Corn Whiskey.’ It was never called bourbon. That would have been unthinkable.

That is how the Lincoln County Process got its name, but what about the process itself? Does it disqualify Jack Daniel's from being called bourbon?

People who say it does cite section 5.23 (b), which reads in part: "Extractions. The removal from any distilled spirits of any constituents to such an extent that the product does not possess the taste, aroma, and characteristics generally attributed to that class or type of distilled spirits alters the class and type thereof, and the product shall be appropriately redesignated. In addition, in the case of straight whisky the removal of more than 15 percent of the fixed acids, or volatile acids, or esters, or soluble solids, or higher alcohols, or more than 25 percent of the soluble color, shall be deemed to alter the class or type thereof."

The only problem is, 5.23 (b) doesn't apply since charcoal leaching occurs before the distillate has been classified. Until it touches an 'oak container,' it is not whiskey, let alone bourbon. You can't change the classification of something unclassified. Section 5.23 very clearly applies only to classified products. If a post-classification process changes the liquid's characteristics, as described in the rule, then reclassification is necessary. Since whiskey must be aged, section 5.23 clearly applies to aged liquid only, not to new make.

Most distillers agree that pre-barrel charcoal leaching functions as a kind of jump-start to the aging process, removing or modifying some of the undesirable congeners that will eventually be removed or modified by the oak barrel's charred interior surface. Jack Daniel's may age a little faster as a result, but that's it. The bourbon gods are not offended.

This got confused when the type of charcoal leaching practiced in Tennessee became less common, because charcoal leaching is also widely employed by rectifiers. In 1868, the Federal Government passed a number of taxation acts, based on the 1864 Special Tax Act and the amended Trades Special Tax of 1866. One of these included a tax on rectifiers.

Rectifiers were defined as: "every person who rectifies, purifies, or refines distilled spirits or wines, by any of process other than the original and continuous from mash, wort or wash, through continuous closed vessels and pipes, until the manufacture thereof is complete, and every wholesaler or retail liquor dealer who has in his possession any still or leach tub; or such keep and apparatus for the purposes of refining any manner distilled spirits (etc.)" 'Leach tub' refers to the process of rectifying a spirit by filtering it through charcoal.

The Rectifiers Special Tax was based on the volume of spirit a rectifier processed. The average tax was $4 a barrel. A spirit barrel was defined as 40 gallons at proof strength (i.e., 50% alcohol by volume).

The Tennessee distillers lobbied the IRS and gained an exception to the tax for their ‘redistillation, leaching and vaporising’ methods, which they used to make straight whiskey, not neutral or nearly-neutral spirit as was the business of rectifiers. The Tennessee distillers insisted they were not rectifiers but primary distillers and, as such, they were already paying the Federal Excise Tax on their output. Levying an additional rectification tax on the same liquid would be unfair. In agreeing and granting the exception, the IRS effectively recognized Tennessee whiskey as a distinctive version of straight whiskey, way back in the 19th century.

The new liquor laws passed right after Prohibition did not include a contingency for Tennessee’s charcoal leaching method. This may be because no one in Tennessee was distilling at the time due to Tennessee's state Prohibition laws remaining in effect after 1933. When distillation finally became legal again in 1937, only Jack Daniel's came back in a meaningful way. They resumed making 'Lincoln County Whiskey' the way they always had, using Lincoln County corn and charcoal leaching of new make before barreling. Because so few distilleries came back after Prohibition, a once common practice was nearly extinct. Only one distillery, Jack Daniel's, was still doing it.

When the time came to start selling their whiskey, Jack Daniel's sought an exception similar to the one granted in 1868. They wanted to be acknowledged as distillers of a straight whiskey product, but one that was distinct from bourbon or rye. They wanted the feds to create a Tennessee whiskey classification but settled for 'whiskey.' Then they put 'Tennessee' in front of it as a truthful statement of product origin, which was permitted under the new rules.

That is how the designation 'Tennessee Whiskey' was born.

From reading Deputy Commissioner Berkshire's letter, I think what went down in 1941 was on the order of an accommodation, a simple solution to a unique problem. Because only Jack Daniel's had this issue, the exception would affect only them, so why formalize it? (George Dickel was still 20 years in the future.)

The fact that Jack Daniel's was accepting a lower classification and rejecting a higher one also suggested a one-off proposition, an anachronism unlikely to recur. Writing a letter is much more efficient, administratively, than undertaking the rule change process. The fact that this occurred almost 80 years ago and hasn't caused any problems (other than confusing a few obsessives) means it was probably a good administrative decision.

Chris Middleton, the former Global Brand Director for Jack Daniel’s, helped a lot with this post.

Wednesday, January 3, 2018

The Bourbon Secondary Market Is Now Legal in Kentucky, Sort of

On January 1, Kentucky’s new ‘Vintage Spirits Law’ took effect. The new law (actually, revisions to the commonwealth’s existing alcoholic beverage statute) says, “A person holding a license to sell distilled spirits by the drink or by the package at retail may sell vintage distilled spirits purchased from a nonlicensed person upon written notice to the department in accordance with administrative regulations promulgated by the department.”

It further defines ‘vintage distilled spirit’ as “a package or packages of distilled spirits that are in their original manufacturer's unopened container; are not owned by a distillery; and are not otherwise available for purchase from a licensed wholesaler within the Commonwealth.”

As of the January 1 start date, ‘the department’ (i.e., the Kentucky Alcoholic Beverage Control Department [KABC]) had issued no administrative regulations or guidelines. As of now, what you see above is all the guidance there is. Retail license holders who want to take advantage of it will have to interpret the new law for themselves, with advice of counsel, of course.

“We won’t be buying 2016 George T. Stagg and adding it to our vintage list,” says Larry Rice, owner of Louisville’s Silver Dollar. “[We’ll] probably keep it early ‘90s and older, early 90s just cause there was some good glut whiskey still being bottled.”

There almost surely are rules coming. The KABC has held some meetings and is accepting suggestions. If you want to contribute, address your thoughts to Christine Trout, Commissioner, Department of Alcoholic Beverage Control, 1003 Twilight Trail, Frankfort, KY 40601. You can also include your suggestions in the comments below, if you wish, but I’m pretty sure nobody at the KABC reads this blog.

The Presidents' Forum (TPF) is a trade association for distilled spirits producers that focuses on regulatory issues. It has submitted its thoughts in a letter to the KABC. TPF worries “that any product sold outside of the three-tier system carries a risk of being counterfeit/contaminated.” They are also concerned about harmony between the new state law and relevant federal regulations.

Under TPF’s suggested rules, all transactions would have to be in person. Checks only, no cash. Sellers would have to provide ‘a sworn affidavit’ to the retailer-reseller, including their name, address, phone number, and email, as well as a statement of when, where, how and from whom the vintage spirits were acquired. The retailer-reseller would be required to keep a record of the seller's vehicle: make, model and license plate number; as well as legible photographs of the bottles being acquired showing front and back labels, intact capsule closures, etc.

Retailer-resellers would, of course, then provide all this to the KABC along with the date and time of the transaction, a description of the vintage spirit acquired, its quantity and the price paid. Retailer-resellers would have to label all bottles obtained in this way so the consumer knows they came from the secondary market.

TPF suggests ‘vintage’ should be defined as pre-metric bottlings only, which means nothing after 1981. This has the advantage of being very easy to determine, but would exclude those ‘early 90s bottlings’ Rice wants. Long term that is a crazy standard, since it will keep receding further and further into the past.

Since the assumption is that the vintage spirits on offer will have been originally obtained legally at retail, and the vintage spirit transaction is between a non-licensed post-retail owner and a licensed retailer-reseller, who will then transact a retail sale with a consumer, it is hard to see where the producers even have a dog in this fight. But anybody can make suggestions, so they did.

TPF, in conjunction with the Wine and Spirits Wholesalers of America, also asked the feds to opine on whether or not retailers taking advantage of the new state law would be breaking any federal rules. Again, this doesn't affect producers or wholesalers directly, they're just looking out for the little guys.

The feds expressed concern that people might use the Kentucky law to become unlicensed vintage spirits wholesalers. Federal law says it is illegal for a retail license holder to acquire alcohol from a non-licensed person who is “engaged in the business of purchasing beverage alcohol for resale to wholesalers or retailers.” If the seller is not as described, then the law doesn't apply. That standard is just vague enough to cause problems.

Kentucky’s current governor, Matt Bevin, is a proud conservative Republican, which should mean he favors minimal regulation. Does that apply to alcohol in a state where 20 counties still permit no alcohol sales and many others severely limit it? I hope it does. Kentucky's new law is revolutionary in terms of bringing at least the ‘vintage’ part of the whiskey secondary market out of shadows. It could be a significant boon to tourism. Why not wait to see what problems arise, if any, rather than write rules in a vacuum?

That puts a lot of responsibility on retailers who choose to become vintage spirits buyers and resellers. No one wants to risk their license, so diving into this pool is not for the faint of heart. Meanwhile, it should be interesting for the rest of us to watch and perchance to taste.

Monday, January 1, 2018

Is Jack Daniel’s Bourbon? The Definitive Answer

To start the new year right, let's put to bed the 'Is Jack Daniel's bourbon?' argument once and for all.

Jack Daniel’s is not bourbon. That is the correct answer. Although it is made almost exactly like bourbon, and pretty much tastes like bourbon, Jack Daniel’s is a little bit different so its makers prefer to call it Tennessee whiskey.

That is all true; undisputed, in fact.

It only gets murky when people try to guess why Jack Daniel’s is not called bourbon. They usually assume it cannot be called bourbon. They further assume that the pre-barrel charcoal leaching process that makes Jack Daniel’s a little bit different is prohibited in the rules that govern bourbon production.

It is not.

The assumption that the so-called ‘Lincoln County Process’ prevents Jack Daniel’s from being called bourbon isn’t just wrong, it is perfectly wrong. Jack Daniel’s doesn’t want to be bourbon, not now, not ever. To its makers and legion of fans, Jack Daniel’s is everything bourbon is and more. ‘The Lincoln County Process’ is the extra step that makes Jack Daniel’s better than bourbon, so they say.

The makers of Jack Daniel's have believed this back to and including Jack himself. Many years ago, the company took steps to prevent the Federal government from forcing them to call their whiskey ‘bourbon.’ That is why some people insist that Jack Daniel’s is bourbon, because it meets every legal requirement. ‘Bourbon in all but name’ is another way of saying it.

The false belief that Jack Daniel’s cannot be called bourbon leads to the equally false belief that Jack Daniel’s is an inherently inferior product. You may not like Jack Daniel’s, either just Old No. 7 or all of the expressions, but you can’t blame that on its lack of bourbon-ness. The Jack Daniel’s production process is as rigorous as that of any bourbon maker, and it checks every box in the bourbon rules.

No one can argue with the brand’s success. Jack Daniel’s is the best-selling ‘bourbon-style’ whiskey in the world.

So why isn't Jack Daniel's called bourbon? The answer goes back to the Repeal of Prohibition in 1933. When the American distilling business restarted, new rules were put in place. They defined different types of distilled spirits in great detail and required producers to use the type classifications that most closely described their products. If your whiskey met the standards for bourbon you had to call it bourbon. At least, that seemed to be the rule.

This was a problem for Tennessee’s Motlow family, makers of Jack Daniel’s Tennessee Whiskey, but it was not their most immediate concern. Tennessee did not repeal its state Prohibition laws in 1933 with the rest of the country. This prevented Jack Daniel’s from resuming operations. Distilling didn’t become legal in Tennessee until 1937.

When Jack Daniel’s started up again, they made some products they could sell right away, such as brandy and unaged corn whiskey, but they knew the Jack Daniel’s Tennessee Whiskey they were making would not need label approval until about 1941, because it would take that long for the first batch to fully age.

When they eventually did submit their label for approval, they did not use the bourbon classification. That began a series of negotiations between the government and Lem Motlow’s son, Reagor. The family had never called their whiskey bourbon before and they didn’t intend to start now.

“Jack Daniel’s was told by the government that they had to call it a Bourbon,” explained a Jack Daniel’s spokesperson. “We objected and used the fact that our whiskey is different and ‘doesn’t have the characteristics of a bourbon.’” Reagor Motlow made several trips to the government office in Louisville to argue his case. Tests were conducted in the government laboratory there. In the end, the government concluded that Jack Daniel’s Tennessee Whiskey had “neither the characteristics of bourbon or rye whiskey but rather is a distinctive product which may be labeled whiskey.” The decision was spelled out in an official letter withdrawing the agency’s earlier objections to the label as proposed.

Here's the letter:

Reagor would have preferred the creation of a ‘Tennessee whiskey’ classification, but he took what he could get.

It is unclear what tests were performed in Louisville and what they might have found to distinguish Jack Daniel’s from bourbon. I prefer to imagine Reagor and the government guys in the ‘lab’ (i.e., bar) performing organoleptic tests (i.e., drinking), when after the third or fourth round one of the government guys declared, “now that you mention it, I think this does taste different.”

Years later, the Schenley Company tried to buy Jack Daniel’s but Brown-Forman got it instead, so Schenley decided to revive the George Dickel brand as a Tennessee whiskey to compete with Jack Daniel’s. They built a distillery in Tennessee and embraced pre-barrel charcoal leaching as a Tennessee thing. ‘Tennessee whiskey’ is still not recognized as a classification in the Federal code, but the Tennessee legislature has enshrined a definition in Tennessee law.

This is pretty much the entire and correct explanation for why Jack Daniel’s is not a bourbon, yet it seems unlikely to end the arguments. Probably that’s the whiskey talking.