Friday, January 25, 2013

Beam Moves Vodka Bottling to Kentucky

A small announcement today from Beam illustrates why bourbon-making is so good for Kentucky, even when bourbon-making itself isn't directly involved.

Last year, Beam acquired the Pinnacle vodka brand, which continues to boom. Pinnacle and other products from that deal are now bottled in Maine, but Beam has decided to close and possibly sell that facility, and will bottle in Frankfort, Kentucky, instead. The move is expected to add 45 jobs. Last year, Beam closed a facility in Cincinnati and moved those operations to Frankfort as well.

Consolidating operations is efficient and just good business, but where to consolidate? In the case of Kentucky's bourbon makers, since Kentucky bourbon whiskey can only be made in Kentucky, and is preferred by consumers, Kentucky is always the obvious choice. Since they aren't going to move bourbon distillation and maturation to another state (or country), they might as well do everything in Kentucky, at least everything that can be done anywhere, like bottling vodka, and that's a boon to Kentucky's economy.

Beam obtained the Frankfort facility, located at Forks of the Elkhorn, in 1987 when it acquired National Distillers. It was then the Old Grand-Dad Distillery but other National brands, such as Old Overholt Rye Whiskey, were also made there. Beam closed the distillery portion but still has active maturation warehouses there, and the bottling operation has been expanded several times. Beam's distilleries are at Clermont, which also has bottling, and Boston, which does not.

Beam's Maker's Mark Distillery in Loretto is entirely self-contained; distilling, aging, and bottling Maker's Mark Bourbon and nothing else. All three distilleries are close to Bardstown, Kentucky.

This phenomenon is not unique to Beam. Last year, Campari America announced that it is building a new bottling facility at the Wild Turkey Distillery in Lawrenceburg, Kentucky. It will bottle Wild Turkey, of course, but also the company's much larger Skyy Vodka brand. Again, since Wild Turkey needs to be in Kentucky, it just makes sense for other company operations to be there too.

Another example is 'California' brandy. Although the grapes are grown in California, and the brandy is distilled there, three of the top five domestic brandies are aged and bottled in Kentucky, primarily because it's cheaper to transport the brandy than it is to transport the used bourbon barrels in which it is aged.

Wherever bottling is done, that's where finished good distribution begins, which benefits shipping companies and their drivers, as well as all the businesses that support that industry, from truck mechanics to road builders.

Although the Commonwealth has gotten much better in recent years, Kentucky often seems to take its bourbon industry for granted. Other states would kill for something like that, an industry so tied to its home state in the minds of consumers that it can't possibly relocate, and that by its mere presence attracts other businesses that produce jobs, tax revenue, and economic vitality.

Both literally and figuratively, Kentucky would be a much poorer place without its bourbon makers.


Alex said...

Slightly off topic: You mentioned in one post that you dont have many non-distiller producer products on your shelf. What are a few that you think are worth trying?

I'm pretty reluctant to give them a go, but some reviews just rave. For example 4roses makes Bulleit. Do you find Bulleit to taste significantly different than a standard 4roses offering? Maybe there are better examples as i think Bulleit claims a different receipe. Some of these claim to be chosen from the best spots in the rickhouse and so forth. Hype or a real difference?

Chuck Cowdery said...

I'm not hostile to non-distiller products, just not especially interested. There are degrees, too. Although Diageo doesn't make Bulleit, it has a long, contractual relationship with the distilleries that do. That's different from someone buying bulk whiskey, putting it in a fancy bottle, and charging an arm and a leg for it.

Alex said...

"That's different from someone buying bulk whiskey, putting it in a fancy bottle, and charging an arm and a leg for it."

Agreed. I would like to avoid these and not shut out the others. Wondered if you had any personal suggestions of good products from non-distiller producers?

Chuck Cowdery said...

Bulleit and Van Winkle, obviously. I've recommended the New Holland Beer Barrel Finished Bourbon, also Redemption Rye. The whiskey is MGPI Indiana, in both cases. Jefferson's is usually good. These are generally worth the money too.

Chuck Cowdery said...

Another one that just occurred to me is Old Pogue.