Brandy And The Holidays.

This is the time of year when people who never buy brandy buy brandy.

Although bourbon whiskey is great in egg nog, many people prefer the more traditional brandy. It also figures in other holiday and winter season recipes, not just for drinks but also desserts and other dishes.

So this is when a lot of people who aren't normally brandy drinkers buy and drink brandy, and a lot of that brandy is American-made.

Most American brandy comes from California, or so most people think. Two of the five largest brands are entirely made in California while the other three are distilled in California from California-grown grapes, but aged and bottled in Kentucky. And as I told you Sunday, four of the top five American brandies are aged in used bourbon or Tennessee whiskey barrels.

The United States doesn't have the fine brandy tradition of France, Spain, and Greece. Except for a few boutiques like Germain-Robin, American brandy producers go for a utilitarian spirit, typically aged for two to three years. Most of it is perfectly acceptable for egg nog, punches, and other holiday uses, and it's much less expensive than the imports.

There are four major grape brandy producers in the United States. I specified 'grape' there because Laird's, in New Jersey, is technically a brandy producer but their fruit of choice is apples.

There are countless small brandy producers, in California and elsewhere, mostly associated with vineyards and wineries.

The Big Four are all in California. They are:

1.  E&J Gallo, in Modesto. They make E&J Brandy, the most popular brand. At about three million cases a year, E&J outsells all other brandies, domestic and imported.

2.  F. Korbel and Brothers/Heck Cellars, in Arvin. Korbel Brandy is #4 in sales at about 350-thousand cases. Although Brown-Forman markets and distributes the better-known Korbel Sparkling Wines line, its sole involvement with the brandy is in supplying Jack Daniel's barrels for its aging. Korbel's sales are concentrated in Wisconsin.

3.  O'Neill Vintners & Distillers, in Parlier. O'Neill is one of the two big independents. It provides all of the distillate for Heaven Hill's Christian Brothers (#3) and Coronet (#5) brands, and possibly some of #2 Paul Masson for Constellation. It produces more than five million gallons of brandy and neutral spirit a year. Some customers, like Heaven Hill, just buy their distillate. For others they do the aging, blending, and bottling too.

4.  Vie-Del Company, in Fresno. Vie-Del is the other big independent. It's a former Seagram's plant, now owned by the Nury family. Together Vie-Del and O'Neill supply distillate for just about every brand except Gallo and Korbel. Like O'Neill, Vie-Del is strictly a producer, selling grape juice, wine, and brandy to customers who handle the branding, marketing and distribution of it.

Delete the "& Wine" Part

In 2005, when Jim Beam Brands Company partnered with Pernod Ricard to acquire and divide between them the assets of Allied Domecq, Beam became a major international player in spirits, but also in wine. A new corporate name followed in 2006 that reflected the change: Beam Global Spirits & Wine, Inc. Now, new facts have made the new name obsolete, as Beam has divested itself of its wine portfolio.

I blogged about this in November, when an $885 million sale of wine business to Constellation Brands was announced. I just received a press release announcing that sale closed today, but it noted an earlier sale I had missed, to E. & J. Gallo Winery. At any event, Beam is now out of the wine business and has close to a billion dollars to spend on other things.

Constellation got Clos du Bois, Geyser Peak, Wild Horse, Buena Vista Carneros and Gary Farrell. Gallo got William Hill and Canyon Road. Constellation is the parent company of Barton, a full-line spirits company with a whiskey distillery in Bardstown, Kentucky.

This exit from the wine business is a little surprising, mainly because such a big deal was made of the new corporate name barely a year ago. If at the time they had intended to get out of the wine business, they could have come up with a less specific name. This suggests that the decision was opportunistic rather than part of a long-term plan. Press releases from Beam parent company Fortune Brands invariably point out how profitable the premium spirits business is, without saying what everybody knows, which is that the wine business isn't.

As a rule, investors hate surprises, so publicly-traded companies usually try to avoid them, but investors like profits even more than they hate surprises, so this surprise sale doesn't seem to be a problem for Fortune. It does, however, suggest that if Beam is thinking about using the proceeds of these sales to make a major acquisition in the spirits business, such as Absolut Vodka, it may not publicize its intentions in advance.

Still, what are they going to do about that name and their new web site?

On a slightly different subject, corporate press releases like the one I got today from Fortune invariably end with a paragraph that describes the corporation's business. It was a big deal a few years ago when the phrase, "Major spirits brands include Jim Beam bourbon.." was changed to read, "Major spirits brands include Jim Beam and Knob Creek bourbons..." It was a way of saying that Knob Creek had arrived as a successful brand. Sadly, Knob Creek has been bumped and replaced by Maker's Mark, one of the key brands in the Allied deal.

Kentucky Brandy

In the 1980s, as the rye business was drying up and all of the rye whiskey distilleries in Pennsylvania and Maryland were closing, what little remaining rye whiskey production there was shifted to Kentucky. The Kentucky distilleries had always made rye whiskey, but when the last of the Maryland and Pennsylvania concerns closed down, only Kentucky remained. Although venerable brand names like Old Overholt, Pikesville, Rittenhouse and Mount Vernon continued to be sold, the whiskey was coming from Kentucky.

Now the same thing is happening with brandy.

Well, not exactly the same thing.

Brown-Forman has long owned Korbel. Heaven Hill owns Christian Brothers and Barton owns Paul Masson. Of the four best-selling U.S.-made brandies only one, Gallo's E&J, is not closely linked to a bourbon producer. All four companies use California grapes and the distilleries are there too. Gallo and Korbel also do their aging there, Korbel in used Jack Daniel's barrels.

Heaven Hill and Barton both ship their new-make brandy to Kentucky, enter it in used bourbon barrels there, and age it in their Kentucky warehouses. Both use warehouse locations for brandy that they prefer not to use for bourbon, specifically the lower floors of Barton's warehouses, and Heaven Hill's brick warehouses in Louisville. Most of the brandy is bottled and sold after two years of aging.