The Humble Beginnings of Sazerac's Bourbon Juggernaught

1969 Benchmark ad

The Sazerac Company originated in 1850 as a New Orleans coffee house (actually, a bar). It was named after an even older French brandy maker, Sazerac de Forge et Fils.

Although 1850 is the date the company claims, 1869 might be a better one. That's when Thomas Handy purchased the Sazerac Coffee House and began to use it as a platform for marketing liquor products.

Today, Sazerac is a large, privately owned-company with a vast portfolio of spirits and wine products. Some it manufactures, others it imports and distributes. Although it is ostensibly headquartered in a New Orleans suburb the company is run out of the Buffalo Trace Distillery in Frankfort, Kentucky, and is probably best known as a bourbon producer.

For a look at some of the American whiskey brands Sazerac makes, click here.

Although nothing in its portfolio rivals Jack Daniel's or Jim Beam for sales volume, names such as Van Winkle, Blanton's, and George T. Stagg make hearts flutter among bourbon enthusiasts.

It all began humbly enough. In 1989 Seagrams sold a basketload of brands from its vast portfolio. Sazerac picked up two bourbons, Benchmark and Eagle Rare. The company didn't own a distillery so it partnered with Heaven Hill to supply the whiskey. The two even shared an advertising agency, Louisville's Fessel, Siegfriedt and Moeller (where I worked from 1978 until 1980).

1975 Eagle Rare Ad

Benchmark and Eagle Rare were notable for being among the last new brands introduced after American whiskey sales began to tank in the late 1960s. That was also an era in which imitation was the sincerest form of flattery among spirits brands. Every successful product spawned numerous knock-offs. Benchmark, launched in 1968, may have been inspired by Maker's Mark, a very small brand then but one that charged a premium price and was growing. Eagle Rare, launched a few years later, is more obviously an homage to Wild Turkey.

Who developed Benchmark is not known but Charlie Beam, grandson of Joe Beam, created Eagle Rare.

Neither brand exactly turned the category around but both survived and were still selling well enough by 1989 to get Sazerac started as a national bourbon marketer.

Three years later, the cozy relationship between Sazerac and Heaven Hill abruptly turned ugly when Sazerac bought a distillery.

Japan's Takara Shuzo Co. had had an interest in the Ancient Age brand and Frankfort's Albert Blanton Distillery since Schenely sold them in 1983 to two veteran industry executives. The Blanton's bourbon brand was created primarily for Takara's use in Japan. With bourbon booming there, Takara wanted the brands but didn't want to operate a U.S. distillery. It sold the plant to Sazerac, with whom it forged a production and distribution agreement that continues to this day.

Overnight, Heaven Hill and Sazerac went from being partners to bitter rivals. In a sideshow, the advertising agency was forced to choose between them. Although it had a longer relationship with Heaven Hill, Sazerac at the time was billing more so it won. Both companies survived the split, the ad agency did not.

The distillery, established in the 19th century but largely rebuilt by Schenley after Prohibition, was very large and had a lot of unused capacity. Sazerac grew its bourbon business primarily with regional brands shed by the giant, increasingly international drinks companies. After Frankfort it acquired a large, modern bottling plant, along with a few whiskey warehouses in Owensboro. Next was a small distiller, rectifier, and bottler in Virginia; then a second bourbon distillery in Bardstown. At the time, the Barton Distillery was desirable primarily for its aging warehouses, but as bourbon sales exploded its distillery became a valuable asset too.

Buffalo Trace was short of aging space because, during the dark ages, Schenley had converted some of its Frankfort warehouses into rentable office space.

Today, all of Sazerac's distilleries operate at full capacity. Many of its brands sell so well they are on allocation. Its Van Winkle brand, made and sold in partnership with the Van Winkle family, has become an international phenomenon. Its other international phenomenon is Fireball, a cinnamon-flavored Canadian whisky. The company has purchased hundreds of acres of farmland adjacent to Buffalo Trace, where it is growing corn now but where aging warehouses will sprout over the coming decade.

Those warehouses that became office space 40 years ago have become whiskey warehouses again.

As Sazerac has made its acquisitions over the years it has also acquired more history. The Buffalo Trace Distillery was once owned by E. H. Taylor. Barton was started by Tom Moore. Sazerac is heir to Mr. Boston, Peychaud's, Fleischmann's, and Glenmore. Its newest acquisition, Southern Comfort, is rooted in the same mid-19th century New Orleans that produced Sazerac itself.

Today, with the entire distilled spirits category doing well and Kentucky-made whiskey doing fabulously, there are many new players. Sazerac has gone from a middling regional company to an international powerhouse in about 30 years. Will any of these newcomers do as well? The point is, they might.

ISC to Build New Barrel Stave Mill in Western Kentucky

Independent Stave Company (ISC), the principal U.S. manufacturer of whiskey barrels, announced today that it will build a new American oak stave mill on 48 acres near Benton, Kentucky (Marshall County). This will be the company's seventh stave mill, its sixth in the U.S. (The other one is in France.)

American Stave Company, a division of ISC, will build and operate the state-of-the-art mill. The company's other U.S. mills are in Missouri, Indiana, and Ohio. In September 2015, American Stave opened its first Kentucky mill in Rowan County.

Once operational, the new facility will create approximately 40 new jobs in the Marshall County community.

“Our strategic plan has been simple – continue investing to best support our customers and the growth in the wine and spirits industry,” confirmed Brad Boswell, president and fourth-generation cooper. “This new stave mill will be an important addition, allowing us to further augment our supply of high-quality American white oak. It is also the final step as we position ourselves for a major expansion to our barrel-making operations.”

Marshall County is known to be an excellent area for sourcing cooperage-quality white oak. American Stave Company has been purchasing logs in this area for years, making it a top contender during site selection.

Once complete, the new mill will supply staves and heading material to the parent company’s cooperages in Lebanon, Kentucky and Lebanon, Missouri.

“As we continue building for today and tomorrow, we are honoring our heritage, and most importantly, our customers,” confirmed Boswell. “Our company has been supplying the wine and spirits industry since our inception in 1912, first as a domestic supplier of staves, and today as a cooperage company crafting a wide range of barrels and oak products. We remain committed to any investments that benefit our customers and support the industry as a whole.”

Typically, stave mills are located close to the resource, America's robust forests of white oak trees. The forests are well-managed and sustainable. Buyers from the mills purchase suitable trees from area landowners. The landowners hire loggers to cut the trees and deliver them to the mill, where the lumber is allowed to air dry naturally until it is dry enough to cut. The wood is then roughly cut into staves as well as pieces for the barrel heads. Then it is shipped to the cooperage, where it is air seasoned for another six months or more. In the cooperage, the rough pieces are planed, shaped, and formed into barrels.

Marshall County is in far Western Kentucky, close to two huge man-made lakes popular for boating and fishing; Kentucky Lake and Lake Barkley. The lakes are parallel and the landmass between them is a national park creatively known as the Land Between the Lakes. The region is also famous for producing some of the world's best ham, sausage, and bacon.

Drinking Alcohol 101

I wrote in the introduction to my book Bourbon, Straight that alcohol is a lot like sex, in that most of what we learn about it growing up comes from informal sources and most of what we think we know is wrong. In both cases the process of separating fact from fiction can be long and arduous.

It can also be delightful!

It is in that spirit that I present the following alcohol basics as a public service.

All alcoholic beverages are either fermented or distilled. Your fermented beverages are beer, wine, and cider. Your distilled beverages are vodka, whiskey, rum, liqueurs, etc.

All alcoholic beverages are a solution of alcohol and water. Distilled beverages are fermented beverages that have been concentrated, they have a higher concentration of alcohol. This is accomplished by separating and removing some of the water from the alcohol and water solution.

The alcohol concentration of any beverage is expressed as the percentage of alcohol by volume (ABV). While beers are usually around 5% ABV and wines are about 12%, spirits are mostly around 40%. The exception is liqueurs, which can be as low as 20%. If you want to be the boss of your alcohol consumption (and you should), this is crucial information.

Where does alcohol come from? Yeast! They are living organisms that eat sugar and excrete alcohol. We call that fermentation. Their limitation is that they die if the alcohol concentration gets much above 10 percent. That’s why we need distillation.

Distillation uses heat to separate alcohol from water in the fermented brew. Traditionally, this process was repeated two or three times until the alcohol reached a desirable concentration. Modern stills can do it in one pass.

Beyond that, alcohol is alcohol. The alcohol (technically, ethanol) in Bud Light is the same as the alcohol in Jose Cuervo Tequila. The alcohol in Châteauneuf-du-Pape is the same as the alcohol in Fireball. The potency of any drink (i. e., its capacity to intoxicate) is just a matter of its alcohol concentration. Intoxication is a matter of how much you drink, how fast you drink it, and the way your particular metabolism processes alcohol. Nothing else matters. When people say different types of alcohol affect them differently, that is called 'imagination.'

The alcohol concentration is always printed on the label, except on beer in some states.

Obviously, mixing your alcoholic beverage with a non-alcoholic beverage (water, juice, soft drinks, etc.) dilutes it, i.e., it lowers the alcohol concentration of the drink. This is a simple relationship. Add one ounce of water to one ounce of a 50% ABV spirit and the ABV of the drink drops to 25%. Simple!

Among distilled spirits, there are straight spirits and flavored spirits. Among the straight spirits you have two categories: Clear or 'white' (vodka, gin, white rum, white tequila, etc.) and aged or 'brown' (whiskey, brandy, anejo rum, anejo tequila, etc.).

White spirits have little or no flavor on their own and so are usually flavored or mixed with something. The most popular mixers are fruit juices and soft drinks. Some drink recipes call for a mixer, a straight spirit and a liqueur. Others mix several liqueurs together. The combinations are endless. Brown spirits typically have a complex and distinctive flavor of their own and are consumed with nothing added (‘neat’), or with only ice (‘on the rocks’), water, or the simplest mixers (e.g., club soda).

Cocktails that use whiskey or another aged spirit should feature that spirit's natural character, not mask it, but that's more on the order of a personal opinion, so I'll leave it there.

Neutral spirits are distilled spirits that exit the still at more than 95% ABV. Any fermented beverage can be used to make neutral spirits. The source material can be anything fermentable but it's usually whatever is cheapest, which is usually corn (maize) or some other cereal. We call that 'grain neutral spirit' (GNS).

‘Vodka’ is what we call neutral spirit sold as a beverage. After distillation, filtration (usually through charcoal) is often used to remove or soften residual taste, color, and aroma. Then the alcohol is diluted with water to 40% ABV. Whether the vodka costs $10 a bottle or $1,000, that's all it is.

Neutral spirits, usually made from grain, are the basis for many other beverages. Gin is a flavored neutral spirit in which juniper berries are the principal flavor. Akavit is a flavored neutral spirit in which caraway seeds are the principal flavor. Both are, essentially, flavored vodkas of which there are many others.

Liqueurs (e.g., Kahlua, Baileys, Jägermeister, Cointreau, Gran Marnier, amaretto, schnapps) are like mixed drinks in a bottle. They combine neutral spirits with flavorings and, usually, lots of sugar or other sweetener. They come in a wide variety of flavors and alcohol concentrations.

Some final words about potency: A mixed drink with a little liquor and a lot of mixer will have an alcohol content about the same as a typical glass of beer or wine. However, straight spirits served without mixers have a much higher alcohol concentration and should be savored, i. e., sipped slowly, possibly accompanied by a chaser (i.e., water, sparkling water, beer, or some other no- or low-alcohol beverage).

There is a difference between drinking and dosing.

So, what should you drink? In bars, especially those frequented by young adults, there usually are all kinds of fad drinks. They come and go. They are fun while they are happening but quickly forgotten. My personal bias is for that pinnacle of the beverage alcohol art, Kentucky Straight Bourbon Whiskey. If it seems too strong straight, dilute it with water or ice. Adjust to taste. Practice makes perfect. By learning to appreciate bourbon at the beginning of your drinking career you will save time and never feel the shame of catching a glimpse of yourself in a bar mirror with a big, pink drink in your hand.

The Smell of Prosperity

Bardstown, Kentucky; Bourbon Capital of the Known Universe.

Many years ago I was in Bardstown and the Barton Distillery had the dry house going, which is what produces that yeasty aroma you can smell all over town. It's a very pungent odor. I asked an old timer on the street if it bothered people. "Nope," he replied. "That's the smell of prosperity."

Kentucky benefits generally from its distilleries and other businesses related to bourbon whiskey, but the counties where distilleries are located benefit the most. Property tax revenue is the most obvious benefit, but bourbon generates taxes and jobs in many other ways too, from trucking to tourism.

At the moment, quite a few new distilleries are recently opened or being built. Most of them are in Kentucky and most of those are in the same communities that already have them, most prominently Nelson County, where Bardstown is the county seat.

Jefferson County (Louisville) has distilleries and is getting more, but it has many other businesses too, so bourbon doesn't make as big a dent. Adjacent to Nelson is Marion County, which has Maker's Mark and Limestone Branch, and may get more. In Boyle County (Danville), Ferm Solutions has a growing business selling yeast to distilleries They also have their own distillery, Wilderness Trail, that is growing too. Franklin, Fayette, Bullitt, Anderson, and Daviess Counties all benefit from the bourbon boom.

Not everyone appreciates the benefits bourbon brings, however. Prompted by a zealous attorney, many people who live near distilleries are trying to profit from the harmless whiskey fungus (Baudoinia compniacensis), a familiar nuisance in whiskey country (Scotland has it too). They're suing some of the distilleries. Considering all that the industry is already doing to pay for their schools, libraries, and other services you might expect them to be a little more grateful and a little less greedy.

The politicians in Frankfort have done a few good things to encourage the industry's growth but they could do a lot more. Kentuckians who buy their state's product pay some of the highest liquor taxes in the country. Kentucky could learn a lot from California if it wants to get the maximum benefit from its locally-made hooch and the culture that surrounds it.

Finally, there is the fact that Kentucky as a whole remains extremely conservative. Kentucky bourbon may not even be sold in 39 of Kentucky's 120 counties and sales are severely restricted in another 49. (Those may not be the latest numbers.) It's not a coincidence that most of the distilleries are in communities with very large Catholic populations. Bourbon and everything about it is frowned upon where the protestant evangelicals rule.

The counties that already have distillery businesses are getting more because they are more likely to have experienced workers available but also because they are generally more welcoming, with tangible business development enticements as well as bourbon-friendly citizens.

Popcorn Sutton Releases Limited Edition Barrel Finished Spirit

This is not John Lunn

A year ago, John Lunn was Master Distiller at the George Dickel Distillery. He was responsible for the production side of the Stitzel-Weller Distillery in Louisville too. At 45, Lunn seemed to have a bright future with the world's largest spirits company.

So it was quite a shock when Popcorn Sutton Distilling named him Master Distiller and gave him control of their shiny new distillery in Cocke County, Tennessee, where Sutton spent much of his later life and, more importantly, close to Gatlinburg, Gateway to the Smoky Mountains and a major tourism destination.

Popcorn Sutton, who died in 2009, is probably America's best-known moonshiner. He was notorious, a true outlaw in a world of poseurs, with few redeeming qualities. But he was a character, one-of-a-kind, with a distinctive look and memorable name.

From that, you can build a brand.

Sutton's widow and one of his buddies started a legit alcohol business in Sutton's name shortly after his death. It was very slapdash and small scale. About three years ago it was acquired by Mark and Megan Kvamme. He's a successful tech investor. She became CEO.

The new distillery in Newport is 50,000 square feet. The 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. That's big, about the same size as the stills at Woodford Reserve. They only use about 20 percent of their capacity now, so there is plenty of room to grow.

Or do contract distilling if you have something you would like to make in those big copper pot stills.

The first new product introduced under Lunn's guidance is Popcorn Sutton Barrel Finished. Barrel finished what, you ask? Technically, it is a 'distilled spirit specialty,' but Popcorn's recipe is a bourbon mash (corn, rye, malt) augmented with sugar.

Meet the new boss, nothing like the old boss.

Although Lunn won't reveal the exact distillation proof he says it is not neutral (>95% ABV) but is higher than a bourbon, which must leave the still at less than 80% ABV. The un-aged distillate is Popcorn Sutton Original. The new product is that same distillate aged for three years in new, charred barrels.

The word 'moonshine' is nowhere to be seen.

How is it? The flavor is original, which is as it should be. The somewhat rough qualities of the still-young spirit are well tempered by the wood. Think smoked caramel and graham crackers. Although it won't take your head off it does have an edge. Lunn knows what he is doing. He has tamed the beast, but not too much.

Popcorn Sutton products are available in about 20 states. Suggested retail on the Barrel Finished is $49.99.

They call it a 'limited edition,' but Lunn says it is not a one-off. They expect it to remain in their portfolio, probably with an annual release.

The Whiskey Appraisal Racket

Photo courtesy of Luther / whiskeyid.com

I am asked all the time what this or that bottle of whiskey is worth. My answer is always the same; it is impossible to say. I will even go so far as to advise that anyone willing to appraise a bottle of whiskey for you is not to be trusted.

This is why.

In the USA, valuations of whiskey are problematic because the secondary market is illegal except for the rare licensed auction. You can't sell alcohol legally without a license. There are no exceptions. And just to be extra clear, trading is the same as buying/selling for legal purposes.

This is primarily a state law matter, although it offends Federal law as well. Primary enforcement, such as it is, comes via each state's alcoholic beverage control authority. Enforcement is lax but that doesn't change the facts. The entire secondary market for beverage alcohol is illegal.

Sales take place all the time, of course, but because they are illegal they aren't publicly reported. When they are reported it is informal, without documentation. Without a reliable record of recent sales to reference, accurate valuations are impossible. Anyone who tells you otherwise is either uninformed or dishonest.

People will hazard guesses based on what information there is and from their own experience but even when it is done honestly and with the best of intentions, it is not like appraisals in other fields. Without a reliable record of past sales it is impossible to estimate value accurately.

That said, and understanding that you have to view skeptically any attempts at valuation, some people do take an honest stab at it. I usually advise folks to start with Bottle Blue Book. They have their limitations, as I've already explained, but they are honest about them. Check out the site.

One criticism: They need to do a much better job of explaining their methodology and making that information easy to find. The best thing they have on the subject is here.

Most people who have something they might like to sell have no idea how much it could be worth, whether $50 or $50,000. A resource like Bottle Blue Book can give you a rough idea, which is all most people want anyway.

This is all presented here for the purpose of providing accurate information about the situation as it now stands. I support the legalization of secondary sales but it is unlikely to happen. Alcohol regulation hasn't changed much in 80 years. Prohibition sentiment is still with us, so constructive dialogue is difficult. State legislatures have been persuaded to modernize laws regarding alcohol production and primary sales on economic development grounds but no one has effectively made a similar argument for normalization of the secondary market.

E. H. Taylor Is a Wheater?

The press release starts like this: "Buffalo Trace Distillery continues its homage to former Distillery owner Colonel E. H. Taylor, Jr. with a special release bourbon whiskey aged in seasoned wood oak barrels. This 100 proof, Bottled-In-Bond, small batch wheat recipe bourbon was aged well over a decade and is a special one-time-only release."

Huh? E. H. Taylor is a wheater? And oak is wood? Who knew?

The point of this product, as Buffalo Trace (Sazerac) sees it, is the special wood treatment. "The barrels in this release underwent a variety of special seasoning processes, including barrels made from staves that were immersed in an enzyme rich bath with water heated to 100 degrees. After spending time in this proprietary solution, these staves were then placed into kilns and dried until they reached an ideal humidity level for crafting into barrels. Other staves were seasoned outdoors for six months, and still others were left outdoors for a full 12 months before being made into barrels and sent to Buffalo Trace Distillery to be filled and aged. All barrel staves were seasoned, dried, and crafted at Independent Stave Company, who consulted on this project with the premiere expert on oak maturation, Dr. James Swan."

So three different barrels, the results all mixed together. That's why there is enough for a release broader than the usual Buffalo Trace Experimental Collection (BTEC) release. Okay, that's weird, but let's get back to this wheater thing. As the press release points out, this is the eighth E. H. Taylor release. All of the previous releases were rye recipe bourbon except for one, a straight rye.

Colonel E. H. Taylor, Jr. Seasoned Wood Bourbon Whiskey should be in stores by the end of the month, for $70.

So does this mean E. H. Taylor is now a wheater going forward? No, this product is this product, although it certainly means E. H. Taylor could become a wheater again at any time in the future.

In response to my inquiry about how E. H. Taylor can be a wheater, I received this reply: "While the E. H. Taylor whiskeys to date have all been rye recipe, the experimental nature of this actually fits nicely with the EHT mark. As you know, Taylor himself was quite an innovator and risk taker. When we put these experimental whiskeys away, we really never know how they will turn out - we really like this one. The profile of this bourbon is different than Weller or Van Winkle. This is an exception to the rule; in fact, we don’t have any more wheat expressions planned for EHT."

When they say, "When we put these experimental whiskeys away, we really never know how they will turn out," they are leaving out part of the explanation. When they put experimental whiskeys away they don't know if they're ever going to release them, nor do they know how they'll release them if they do. This whiskey didn't go into barrels branded as E. H. Taylor. They didn't know what it would eventually be, if anything. If they come out at all, most experiments come out in the BTEC. For reasons known only to them, they decided to put this one out as E. H. Taylor instead.

This is something new. Several brands now, including E. H. Taylor, are selling a straight rye under the same brand name as a bourbon. There is good precedent for that. Many brands did it before Prohibition. Jim Beam has done it ever since Prohibition ended. Wild Turkey has done it for a long time as well. Newer brands such as Knob Creek, Woodford Reserve, Russell's Reserve, and Bulleit have followed suit. George Dickel and Jack Daniel's, which never had rye whiskeys in their lines before, now do. None of the famous wheater brands -- Maker's Mark, W. L. Weller, and Old Fitzgerald -- has ever sold a straight rye or a rye-recipe bourbon. And there has never been a brand that sold both a rye-recipe bourbon and a wheated bourbon under the same brand name.

Until now.

This is a weird dilution of the brand identity. That doesn't necessarily make it bad. Certainly no one can say the E. H. Taylor line is going for a consistent flavor. This will surely taste completely unlike any previous E. H. Taylor release. That's probably the main thing consumers need to know. Like they say about investments, past experience does not necessarily predict future results.