Why Can't Micro-Distilleries Learn to Under-Promise and Over-Deliver Instead of the Other Way Around?

With a couple days to spare, the March issue of The Bourbon Country Reader is in the mail. There is so much going on in American whiskey these days, it's hard to make deadlines.

But in the mail it now is, Volume 15 Number 2. The main headline: "Some Micro-Distilleries That Are and Some That May Never Be." The key word there is 'may,' because I look forward to being proved wrong. After this issue went to the printer, I went to Louisville and spent time with some of the producers in question. I have nothing to retract but there is cause for at least guarded optimism in a couple of cases.

The most disturbing part of this phenomenon is not Potemkin Distilleries as such, it is the syndrome described in the headline above. In business, it's considered a best practice to under-promise and over-deliver. The premise couldn't be simpler, delight your customers instead of disappointing them. Regretfully, too many micro spirits producers do the opposite. They claim their special aging process makes their six-month bourbon taste better than Jim Beam's best. Their own distillery will open soon and they will eventually stop sourcing whiskey from Indiana and sell their own stuff exclusively. Their bourbon recipe has been in the family for 500 years. It was Al Capone's favorite.

And, yes, the micro-producers aren't the only ones who make shit up, but isn't authenticity supposed to be their raison d'être?

As an extreme example, N-th Degree Distillery, which is under construction at the Party Source retail store in Bellevue, Kentucky, has already declared conclusively that its bourbon will be the best in the world. They did this in the invitation to their groundbreaking. They'll probably be glad to know they aren't mentioned in the new Reader, but that sort of hyperbole is certainly part of the problem.

Who is in the article?

If I told you that, this wouldn't be a teaser.

In the new Reader, we also hear from MGPI, the macro-distillery behind many of the micros, about its future plans for whiskey production at Lawrenceburg, Indiana, the distillery formerly known as Lawrenceburg Distillers Indiana (LDI). The trend toward producers cheapening their legacy brands to improve profitability is also discussed.

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Here Are the Bourbon Classic Cocktail Challenge Winners

As I confessed on Sunday, I was too busy enjoying myself Friday evening to pay much attention to the competitive part of the event, but I recognize its importance.

In recent years, Louisville has come on strong as a great place for creative cuisine and cocktails, and in most cases the purveyors are heavy into bourbon. No event of which I'm aware has highlighted this better than last Friday's Bourbon Classic Cocktail Challenge.

In addition to producing a great event, the Bourbon Classic folks have introduced a new term: 'bourbon arts.' We can't all make bourbon, but if we exercise creativity in its service, we are practitioners of the 'bourbon arts.' Okay, why not?

So, here is the press release:

Bourbon Classic 2013, the new bourbon arts celebration that took place at the Kentucky Center for the Performing Arts this past weekend, brought together hundreds of enthusiasts from across the country to identify the best of bourbon cocktail and culinary pairings.

A packed Kentucky Center witnessed Jared Schubert’s “Dust Bowl Smash” take honors as the Grand Champion in the 2013 Bourbon Classic Cocktail Challenge. The Bourbon Classic’s Friday night “Cocktail Challenge” featured cocktails and hors d’oeuvre pairings prepared by teams of chefs and master bartenders.

Emcee Angie Fenton guided attendees through the event as they voted for their favorite small plate. Cocktails were judged by an expert panel including Celebrity Chef Edward Lee, 610 Magnolia, Joy Perrine, author of The Kentucky Bourbon Cocktail Book, and Noah Rothbaum, Editor-in-Chief, Liquor.com.

The following winners were recognized:

• 2013 Grand Champion: Jared Schubert of Monkey Wrench, representing Four Roses.
• 2013 Classic Cocktail Winner: Isaac Fox of Volare, representing Maker’s Mark, serving a “Vieux Carre” cocktail.
• 2013 Contemporary Cocktail Winner: Jared Schubert of Monkey Wrench representing Four Roses, serving a “Dust Bowl Smash.”
• 2013 People’s Choice Classic Small Plate: Anthony Lamas of Seviche, serving Tuna “Old Fashioned” Seviche, paired with Four Roses.
• 2013 People’s Choice Contemporary Small Plate: Shawn Ward of Jack Fry’s, serving Seared Scallop and Dried Citrus with Edamame Puree, paired with Michter’s.

The event represented some of the bourbon industry’s most well-known brands, which signed up as founding sponsors. The Urban Bourbon Trail is the welcoming sponsor of this event and Kentucky Proud is the Culinary Sponsor, joining Buffalo Trace Distillery, Four Roses Bourbon, Michter’s Distillery, Heaven Hill Distilleries, Inc., Jim Beam, Lexington Brewing and Distilling Company, Maker’s Mark, Blanton’s, Sullivan University National Center for Hospitality Studies, Angel’s Envy, Bulleit Bourbon, Jefferson’s Bourbon, Nestle Waters, Spirits on Ice, LLC, Wildcat Water, Willett Distillery, Art Eatables, Corsair Distillery, Limestone Branch Distillery and Neil Sulier Art.

The Bourbon Classic was co-founded by Tony Butler of FSA Management Group, an established event planning company based in Louisville, and Justin Thompson and Seth Thompson of The Bourbon Review.

“Congratulations to all these winners, who helped make the event such a huge success,” says Tony Butler, co-founder of the Bourbon Classic. “Like Bourbon Classic, these winners help tell the story of Bourbon—and showcase all the talent that drives the industry forward.”

“Bourbon Classic’s Friday night event brought together nationally known chefs, bartenders and distillers which is believed to be the first attempt at having this many stars of the Bourbon Arts working together at the same event,” says Justin Thompson, co-founder of the Bourbon Classic.

Four Roses Small Batch Bourbon: The Chuck Cowdery Blend

Last week, the first stop for Bourbon Boot Camp was Four Roses, where we participated in a blending exercise. It was one of the highlights of the trip.

In the world of whiskey, 'blending' is a term of art. That means it has a specific meaning that is somewhat contrary to the ordinary dictionary meaning. "To blend" simply means to combine or mix two or more different substances, but in whiskey it specifically means a mixture of two or more different types of whiskey (and even non-whiskey spirits). Therefore, a mixture of straight bourbons is still a straight bourbon, but a mixture of bourbon whiskey and rye whiskey, for example, is a blended whiskey.

This is an especially sensitive subject at Four Roses because of the brand's history. In its pre-Prohibition heyday, Four Roses was one of the most popular straight bourbons in the country. After Prohibition the brand's new owner, Seagram's, converted it to a blended whiskey. Looking at the British and Canadian practice Seagram's, a Canadian company, decided that straight whiskey was an anachronism. Blends were the future.

Boy, were they wrong.

Four Roses began as an all-whiskey blend, but quickly began its descent into cheapness, as did most American blends. American blends (Seagram's Seven, Kessler's, Philadelphia, and Imperial are some examples) compete primarily on price, so the typical American blended whiskey is as cheap as the law allows, just 20 percent whiskey and 80 percent vodka in most cases. Four Roses American Blended Whiskey sucked. Sales declined to next to nothing and the brand was pulled from the U.S. market.

Strangely, Seagrams continued to sell Four Roses as a straight bourbon outside the U.S., and it became the leading American whiskey in many markets. After Kirin Brewing bought the brand a decade ago, they began the process of re-introducing Four Roses Kentucky Straight Bourbon Whiskey back into the U.S.

Although the blends were a bad idea, not everything Seagram's did was wrong. One Seagram's practice that Four Roses still uses is the making of ten different bourbon recipes. Those are the ten full bottles in the picture. Since they are all straight bourbon, we blended them together in only the dictionary sense of the word. The result was not a blended whiskey, it was a straight bourbon.

Except for Four Roses Single Barrel, which is entirely the OSBV recipe (second from the left), every Four Roses product is a blend of two or more of the ten recipes. That's what we bourbon boot campers were given the opportunity to do, create our own Four Roses (Very) Small Batch Bourbon.

After sampling all ten (did I mention it was 10:00 o'clock in the morning?), I decided to make a high-rye bourbon. Four Roses uses two different mash bills and the higher rye one is 35 percent rye. That gave me five bourbons to work with, differentiated by their yeast strain. I chose OBSF as the base for its mildness, then tweaked it with the more flavorful OBSV and OBSQ.

If you have those three bourbons at home, and I know a few of you do, Four Roses Small Batch Bourbon: The Chuck Cowdery Blend is 60 percent OBSF, 30 percent OBSV, and 10 percent OBSQ. All were five to six years old.

It is a fine, well-balanced bourbon, and rarer than Pappy Van.

Louisville's Bourbon Classic a Slam Dunk

Even though it competed with college basketball in a basketball-crazy town whose local heroes are the #1 seed, this weekend's Bourbon Classic appears to have been a big success.

It was preceded for journalists (and me) by a two-day 'bourbon boot camp' that visited six producers (Four Roses, Town Branch, Buffalo Trace, Maker's Mark, Heaven Hill, Jim Beam) in two days.

We were driven around in a bus. We drank. I recommend it. Thanks Mint Julep Tours.

The Bourbon Classic itself began Friday evening and continued Saturday afternoon though Saturday night. It is a joint production of The Bourbon Review Magazine and FSA Management Group, with support from the Greater Louisville Convention and Visitors Bureau. All events were held at the Kentucky Center for the Performing Arts. Everybody did a fantastic job. It was well conceived and well organized. The Bourbon Classic is intended to be an annual event.

Both evening events were held in the main lobby of the Kentucky Center for the Performing Arts, an exceptionally beautiful space highlighted with major works of visual art. Pictured above (below the projected Bourbon Classic logo) is The Coloured Gates of Louisville by John Chamberlain (1988). The space also includes major, large-scale works by Jean Dubuffet, Louise Nevelson, and Joan Miro.

Both evening events were reception-style. Guests wandered from table to table and socialized along the way.

On Friday, the participating bourbon producers were paired with restaurants, whose chefs prepared special dishes--on the spot in many cases--and whose head mixologists created compatible cocktails using the products of their bourbon company partners. There was a competition, if you care about such things. Mostly there was an evening of truly exceptional eating and drinking.

Satuday evening was similar, except for the addition of live music, a full dinner buffet with Kentucky specialties such as corn pudding, shrimp and grits, benedictine cheese spread, country ham, and roast tenderloin (both beef and pork). Local restaurants brought special desserts and the bourbon makers offered both cocktails and straight pours.

There was an after party in the The Kentucky Center's bar and an after-after party at a nearby restaurant.

Saturday began in the Bomhard Theater, with eight master distillers each interviewed individually in the style of 'Inside the Actor's Studio.' That was followed by Bourbon Classic University. Attendees had a choice of three different programs for the first :45-minute session and four for the second.

The weekend's stars were the bourbons and bourbon-makers, and Louisville's most exciting and innovative chefs and restaurants.

And the Louisville Cardinals advanced to the Sweet 16.

In short, the Bourbon Classic was exactly what it should have been. Congratulations to everyone on a wonderful first-year event. Bourbon Classic 2014 can't come soon enough.

Bourbon Classic Is Next Weekend

Next weekend, I will be in Louisville for the Bourbon Classic. It starts Friday evening, March 22, at 7:00 PM and continues on Saturday, March 23, starting at 2:30 PM at the Kentucky Center for the Performing Arts, 501 West Main Street in downtown Louisville.

I'm moderating a panel at 5:30 PM on Saturday called "Lives, Legends and Legacies: An Interactive Conversation about the Bourbon Barons." The panel is Bill Samuels Jr., retired Maker's Mark CEO; Mike Veach, bourbon historian; and Freddie Johnson, Buffalo Trace tour guide and third-generation distillery worker. We're going to talk about Kentucky bourbon history, from settlement to the present, or as much as we can in 45 minutes.

The panel is part of something called Bourbon Classic University. You have a choice of three programs for the first session (4:15 PM - 5:00 PM), and four for the second (5:30 PM - 6:15 PM). Mine is during the second session and I do so hope you'll pick me.

I'll be around for all of the other major events too.

There has never been anything quite like the Bourbon Classic. It's the first major event for bourbon enthusiasts presented in Louisville, Kentucky's largest city. It's 14 hours of nothing but Kentucky whiskey, bourbon and rye. It's a new event, inspired by the recent explosion of interest in American whiskey. The complete schedule of activities is here.

One ticket gets you into all of the Friday activities, another gets you into all of the Saturday activities, and you can get a package deal for both. At this late date, you probably should call the box office, toll free, at  800-775-7777. (In Louisville it's 502-584-7777.)

All events are at the beautiful Kentucky Center for the Performing Arts, which is downtown on the riverfront, on Louisville's historic 'Whiskey Row,' where most of Kentucky's whiskey companies had their offices and warehouses during the industry's pre-Prohibition heyday.

Heaven Hill Distilleries, which has had offices on Main Street since the 1940s, is presently converting its building into The Evan Williams Experience, opening sometime next year.

Main Street and vicinity is where you'll also find the Louisville Slugger Museum, Louisville Slugger Field, 21c Museum Hotel, Frazier History Museum, Muhammad Ali Center, Kentucky Show, Kentucky Museum of Art and Crafts, Louisville Science Center, Yum Center, and many bars, restaurants and hotels. Much of Main Street still looks as it did in the late 19th century. It has the largest concentration of 19th century cast iron facades outside of New York.

This promises to be a very fun weekend and because it's the first time, anything can happen. I'm looking forward to it and hope to see you there.

The Case of Fleischmann's Rye

Fleischmann's Rye is an enthusiast's favorite because it is decent and cheap, and a charming novelty due to its extremely limited distribution. Available only in northern Wisconsin, where they drink all sorts of beverages nobody else does, like Korbel Brandy and peppermint schnapps, it's the only rye made at the Barton 1792 Distillery in Bardstown.

Fleischmann's Rye is cheap, sold only in 1.75 liter plastic bottles at 80° proof (40% ABV). There's a raw pleasure in a well-made young rye but that's all it ever was. The whiskey's appeal is mostly in its rarity.

Recently, some posters on straightbourbon.com revealed that Fleischmann's Rye has changed its label. Instead of saying 'Straight Rye Whiskey,' it now says 'Mash Rye Whiskey.' This led to some tea leaf reading and inquiries to the brand's owner, Sazerac, to figure out exactly what it all meant.

To be labeled as 'straight rye whiskey,' a whiskey must be at least 51 percent rye, distilled at less than 160° proof (80% ABV), entered into new, charred oak barrels at 125° proof (62.5% ABV), and aged for at least two years. If aged for less than four years, the label must carry an age statement.

On the new label, the word 'mash' was inserted so you won't notice 'straight' is gone, but it has no effect on the product's legal class and type, which is now simply 'rye whiskey.' It still has to be at least 51 percent rye, distilled at less than 160° proof (80% ABV), and entered into new, charred oak barrels at 125° proof (62.5% ABV) or less, but there is no minimum age required and no age needs to be disclosed.

This does not appear to adhere to the rules as written, but it is the way TTB has been interpreting them.

Sazerac was selling Fleischmann's at three years (36 months). They may still do that, but now they don't have to. This part of it is just like the Old Grand-Dad proof cut. With these old, small, and in this case really cheap brands, the producers believe they can cut the proof, cut the age, change the label, but as long as they don't raise the price, the consumer won't notice.

This is all done to extract as much profit as possible from a very marginal product.

As small as Fleischmann's is, Sazerac must sell a lot of it in that one market to justify making it. Unlike a small bourbon brand, which is just a matter of slapping a label on a standard bottle, they have to actually make this stuff.

Before Sazerac bought them, Barton was active in the contract distilling and bulk whiskey markets. Some of the High West ryes are Barton. They may have sold some of it that way, and probably used some of it in the many different blends they make. On the other hand, a 36-month whiskey is practically just-in-time manufacturing for the whiskey business, being able to sell something three years after it's distilled -- and now maybe less than that -- is a nice little business.

When asked about the change, Sazerac revealed that they briefly discontinued the brand, then brought it back. That shows how borderline it is, profit-wise.

About the smallest batch a distillery can make is the contents of one fermenter, but the start-up and shut-down for one fermenter is the same as a whole day's production, so one day tends to be the smallest practical unit of production. Even today, with rye production up, a distillery like Sazerac's Buffalo Trace might do three or four days of rye in the spring and three or four in the fall, but back in the doldrums it was one day in the spring and one day in the fall.

Barton has been doing something like that, or maybe just one day for the whole year, and that has been enough for Fleischmann's, for their blends, and for contract/bulk sales. When Sazerac bought Barton they were shut down for rather a long stretch, about 18 months, because Sazerac felt they had been over-producing. When the rye ran out because of that gap, that may have been when they discontinued it. At some point they decided to make it after all, and probably went right back to what they had been doing, production-wise.

The Best-Kept Secrets in Bourbon Are Hiding in Plain Sight

There are some really terrific bourbons out there that most people overlook. In many cases they are old brands that the manufacturers sell but don't support. Some offer a chance to taste something a little different, others are among the best bourbons you can buy, and all are great values. While a few have limited distribution, many are hiding in plain sight at your neighborhood whiskey monger.

A prime example is Weller 12-Year-Old. This wheated bourbon from Sazerac is right up there with the very best bourbons available today, and it costs less than $30 a bottle in most places. A few years ago it was in very short supply but now seems readily available. If you are pining for Pappy but have never had Weller 12, what's wrong with you?

At the other end of the spectrum is Very Old Barton, another Sazerac product. It is a 6-year-old, rye-recipe bourbon that used to be sold only in Kentucky and a few southern states. In Kentucky, it is very popular and competes head-to-head with Jim Beam and Jack Daniel's. It is now more widely available but not national. Unless you drink 1792 or Ten High, you've probably never tasted a bourbon from this distillery. Very Old Barton is a solid, reliable, standard bourbon that usually sells for less than $20, often a lot less.

Old Forester is the brand that launched Brown-Forman 143 years ago. It was the first bourbon to be sold only in bottles. It has the same recipe as Woodford Reserve. The 86° proof (43% ABV) is usually about $20 and the 100° proof (50% ABV) is usually about $25. Again, it is just a good, solid, dependable rye-recipe bourbon at an excellent price.

Old Grand-Dad, discussed here on Monday, is one of the few high-rye bourbons and definitely the least expensive one. Its bonded expression has long been the best-selling bonded bourbon in the country. The bond usually sells for about $20, the 80° proof (40% ABV) is about $17. It's made by Beam.

Also from Beam is Jim Beam Black Label, which is 8-years-old, 86° proof (43% ABV), and about $22 a bottle. Compare that to Knob Creek, which is the same juice at 9-years-old and 100° proof (50% ABV), and about $30. Even though it carries the Jim Beam name, or perhaps because of it, many bourbon fans overlook this superb value. It's available everywhere.

Evan Williams Black Label is Heaven Hill's flagship brand and the #3 best-selling American whiskey, after Jack and Jim. Again it's a good, solid, standard rye-recipe bourbon, selling in many places for around $10.

No one who really knows bourbon would turn their nose up at any of these.

Is It Time for the Three-Tier System to Go?

Most people don't realize how different the beverage alcohol business is from other consumer products businesses. The fact that beverage alcohol products carry a much higher tax burden is just the beginning.

The 21st Amendment to the Constitution, which ended Prohibition in 1933, is short and sweet. The second section is the important one. It gives states the right to control "the transportation or importation" of alcohol within their states. States do not similarly have the right to control "the transportation or importation" of Coca-Cola or Twinkies, as in most cases the Constitution's Commerce Clause assures a nationally-regulated market.

One of the ways states control alcohol is through the three-tier distribution system. The tiers are producers, distributors, and retailers. Other businesses have similar channels of distribution but with alcohol, it's not optional. The essence of the system is that producers (i.e., distilleries, bottlers, importers) cannot sell directly to retailers (i.e., bars and stores). They must sell to an intermeidary, the distributor, and all retailers must buy from that intermediary. Furthermore, a producer can't have an interest in a distributor or retailer and distributors and retailers are similarly restricted.

One exception to the no-cross-ownership rule is for the state itself, which can be both distributor and retailer. There is no state in which the state operates bars but several operate all of the state's liquor stores.

The other exception to the no-cross-ownership rule is distillery gift shops. In that case, the producer can own a retailer, but the gift shop still has to buy the merchandise from a distributor. It does not, however, have to be shipped from the distillery to the distributor's warehouse then back to the distillery for sale. The transaction is all on paper, but it's still absurd.

Since each state can set its regulatory scheme up however it wants, each one does and they are all different. Each state makes producers jump through a different set of hoops.

The producers wish they could sell directly to major chains, and even directly to consumers through their own retail stores. Big retailers wish they could move their alcoholic beverage merchandise across state lines as easily as they do everything else. Producers can talk to retailers and they do, to set up promotions and such, but every deal has to go through a distributor, state by state.

The purpose of these systems was to prevent the perceived abuses that led to Prohibition in the first place and in order to get back in business, alcoholic beverage producers were willing to agree to just about anything. The system has changed little since it was established 80 years ago.

Today, the system has broken down in the sense that rules against cross-ownership are easily gotten around, and the local companies distributors were supposed to be are now legal fictions, since most distribution is done by national or large regional companies. The idea was that a producer could be remote and hard to touch legally, but a distributor would be local and thus more readily brought before the law. It's still true in the sense that distributors are required to have in-market assets, and operate through state-by-state subsidiaries, but for the most part they are massive and remote, larger than all but the biggest producers.

Today, the mandatory distribution tier merely adds cost without providing any benefit to anyone except the distributors themselves and their political patrons, including the state's Alcoholic Beverage Control agency (ABC), which itself is an anacronistic boondoggle.

Like a lot of Prohibition vestiges, the problems these systems were meant to solve don't seem like problems anymore, but the system doesn't change because there are people who have a powerful financial interest in keeping things the same. It's the kind of government waste that always seems to have bipartisan support.

Beam Cuts Old Grand-Dad Proof Without Protest

Compared to the recent hubbub about cutting the proof of Maker's Mark, which was subsequently rescinded, drinkers have largely been silent about the cut from 86° proof (43% ABV) to 80° proof (40% ABV) for the lowest-proof expression of Old Grand-Dad bourbon.

Although the change took place more than six months ago, it has only recently appeared on the radar, thanks to folks on the straightbourbon.com discussion board.

Old Grand-Dad's bottled-in-bond (100° proof/50% ABV) and 114° proof (57% ABV) expressions remain unchanged. In fact, the culprit in the proof cut, according to Beam, is the bond.

Asked to comment, Beam provided the following statement: "This was an adjustment that happened mid-year 2012 to address certain factors particular to the Old Grand Dad brand, including maintaining a competitive retail price amidst higher input costs, while continuing to meet surging demand among bartenders and consumers in Old Grand Dad Bonded – which is 100 proof and one of very few bonded products out there. It should also be noted that Old Grand Dad’s signature high-rye mash bill – which has certainly set the brand apart from most other Kentucky Straight Bourbons in the last few decades – has not changed (and will not change)."

Incidentally, 80° proof  is effectively the floor for straight spirits such as whiskey. Producers are permitted to bottle whiskey at lower alcohol levels, but are required to label it 'diluted whiskey.' That tends to be off-putting to consumers, even though virtually all whiskey sold is, in fact, diluted for bottling.

Old Grand-Dad is a brand established in the late 19th century. After Prohibition, it returned as part of National Distillers. It became a Beam brand when the two companies merged in 1987. Of the many bourbons Beam acquired in that transaction, the original recipe was retained for only one; Old Grand-Dad. The rest (Old Crow, Old Taylor, etc.) became Beam juice.

The Old Grand-Dad recipe was retained because its mash bill contains about twice as much rye as Jim Beam and other standard bourbons, and a consequently smaller proportion of corn. It was also, at the time, commanding a premium price, so the higher cost of preserving its integrity was deemed acceptable. The Old Grand-Dad recipe is also used for Basil Hayden bourbon, which Beam recently announced saw sales surge in 2012.

When bourbon sales collapsed in the 1970s and '80s, brands whose names start with 'Old' took the biggest hit. It remains conventional wisdom among producers that legacy brands, especially the 'Olds,' deserve only minimal support, as they are only bought by long-time fans and aren't capable of attracting significant numbers of new consumers.

That may or may not be true, but if you're a bourbon enthusiast and haven't tried Old Grand-Dad yet, you should -- while you still can.

Good Economic News, Thanks to Bourbon and Rye

Do you like business stories where American manufacturers enlarge their factories and add workers so they can increase production? Especially when a lot of that increased production is destined for export? Or when companies put new offices into a revitalizing downtown? That's what whiskey is doing for Kentucky and, in this case, her largest city, Louisville.

Heaven Hill has announced that it will increase capacity at Bernheim, its Louisville distillery, by 50%; increasing annual output to about 5.3 million gallons. This is Heaven Hill's second major expansion since it acquired the distillery in 1999. It is expected to be completed next year.

All of Heaven Hill's whiskey is distilled at Bernheim and transported by tanker to Bardstown, where it is barreled and aged.

Heaven Hill is also building a new visitors center, "The Evan Williams Experience," on Main Street downtown. It too will open in 2014.

A few blocks away, Beam is building its Global Business Services Center, expected to open in the next few months. Beam's headquarters are in Deerfield, Illinois, a suburb of Chicago, but the company's principal U.S. production facilities are in Kentucky.

The Global Business Services Center will combine select financial and human resources transactional activities into one centralized hub. The center will act as the primary point of contact for Beam’s North America business in the areas of benefits, compensation, accounts payable, payroll and other key business processes. It will employ about 60 professionals.

This is on top of recent production expansions at its Clermont, Boston, and Frankfort facilities, and a huge investment in a new visitors center at Clermont.

These are only the latest announcements. American whiskey is also helping the economies of Tennessee and Alabama.

Every community likes to see local businesses expand. What's unique about American whiskey is that there is so much mystique around Kentucky and Tennessee that the distilleries can't leave. At the very least, they need their distillation, aging, and tourism facilities there. But since those have to be there, and the state and local governments have continued to be supportive, it makes sense to consolidate other parts of the business there too.

Although air quality is sometimes a problem, Louisville has a high quality of life coupled with a low cost of living and a mild climate. There are certainly opportunities to attract more business from other companies that are in the whiskey business, directly or indirectly.

Much of the industry's current growth is driven by predictions of explosive sales increases in Asia, particularly in India and China. If all of that goes according to plan, the future for Kentucky is bright.

CSI For Whiskey Enthusiasts

So you're down in the basement at Grandpa's house, a few days after the funeral. Mom says you can keep anything you find.

After wading through box after box of carefully washed tomato cans, you find a weathered wooden crate. Inside it are several clear bottles of dark liquid, and the label says "1895." Then you wake up.

Finding a cache of old whiskey is a popular fantasy, but when it actually happens it can be hard to figure out exactly what you have.

About a year ago, Adam Herz heard about an intriguing stash of bottles that has been making the rounds. He was able to examine them in person and even taste the contents. Then he donned his CSI sunglasses and went to work.

The result is "Adventures in Whiskey, the Case of the Strange Fitzgerald." It's on the web site of the L. A. Whiskey Society, where Herz is the most prolific contributor.

With old whiskey, labels can be monkeyed-with but bottles don't lie. Herz's article is one of the most authoritative you'll find on how to use bottle markings--intentional and unintentional--to accurately identify what's inside. In his Fitzgerald case study, Herz can't answer every question, but what he does discover is remarkable. Both his science and reasoning are unassailable and he tells the story in a zippy way.

These days, a lot of people write about whiskey. Most of it is earnest but ill-informed opinion. In contrast, what Herz delivers is fact-based information that will expand your knowledge of whiskey, whiskey hunting, and whiskey history.

New Barrel Proof Elijah Craig 12-Year-Old

Heaven Hill announced yesterday a special bottling of Elijah Craig 12-Year-Old Barrel Proof Small Batch Kentucky Straight Bourbon Whiskey. This limited edition bourbon will be allocated to all markets that currently offer Elijah Craig.

According to the company, this release takes advantage of both the surging popularity of high end bourbon and American whiskey, and the trend toward high proof or barrel strength bottlings. It also leverages the critical acclaim for Elijah Craig Bourbon and the high regard with which critics and aficionados hold the brand.

The new Elijah Craig Barrel Proof Small Batch release will begin shipping next week. Quantities are limited. The suggested retail price is $39.99. Proof of the initial release will be 134.2° ( 67.1% alcohol/volume). The 12-year-old age statement has moved to the back label to make room for 'Barrel Proof' on the front.

In addition, the release will forgo traditional chill-filtering, meaning all the natural esters and taste components from the barrel are preserved, giving the bourbon a particularly rich flavor and mouthfeel.

The new release will be offered in the traditional, distinctive Elijah Craig flask-style 750ml bottle, with the familiar oversize cork stopper and Elijah Craig signature blown into the front of the glass.  It will carry a dark brown version of the cartouche-style Elijah Craig label, with 'Barrel Proof' highlighted in red and hand written proof/alcohol by volume information, which will vary from one dump to the next.

“With the current unprecedented popularity of American whiskeys in general, and high end bourbon releases in particular, we feel that this release of Elijah Craig Barrel Proof is poised for great critical acclaim and sales success,” noted Heaven Hill Senior Brand Manager Susan Wahl. “It hits all the right sweet spots for today’s ultra-premium Bourbon consumer—barrel proof, 12 years of aging in open rick warehouses, non-chill filtered, and very small dumps of barrels. This barrel proof bottling, and the recent 20 year old Single Barrel bottling, have taken the Elijah Craig range to unprecedented levels of demand and stature.”

In Praise of Straight (It's Not What You Think)

The advent of products such as Kansas Clean has revealed a shocking truth. Distilled spirits that contain as little as five percent whiskey are allowed to call themselves whiskey. They can whiskey-this and whiskey-that all over the place, but is their product really whiskey? By law, yes. By common sense, no.

But law will trump common sense every time.

For you as a consumer, it shouldn't be necessary to memorize the Federal Standards of Identity for Distilled Spirits just to buy a good bottle of hooch, and it's not.

There is a simple, one-word solution, but the word to remember and look for is not 'whiskey,' it's 'straight.'

'Straight' is a modifier that applies primarily to American whiskey and not to most other types of distilled spirit. It means that certain specifications have been met, including aging in new, charred oak barrels for at least two years. It doesn't guarantee that the product will be good but it does guarantee that it will be what most people understand to be whiskey.

We're talking about American whiskey here, like bourbon or rye, not scotch, Canadian, or Irish. They have their own rules and peculiarities.

Straight whiskey (or straight bourbon, straight rye) is what most people mean when they just say whiskey. If asked to elaborate, they might call it 'real whiskey' or even 'pure whiskey,' but those terms are forbidden, at least on whiskey labels. That's okay as long as you know that the alternative is 'straight.'

If you want to blame someone for the semantic awkwardness of all this, the person you want is William Howard Taft, the 27th president, whose Taft Decision in 1909 allowed products that contain liquids other than whiskey to call themselves whiskey. It created different types of whiskey, the most whiskeyish of which is straight whiskey.

Unfortunately, there are a few straight whiskeys that don't have 'straight' on their label. Jack Daniel's doesn't and possibly can't, even though it meets all the key requirements. Even so, remembering to look for 'straight' is a good tip for anyone who wants guidance but doesn't want to get bogged down with details. 'Straight Bourbon,' 'Straight Rye,' and 'Straight Whiskey' are the terms you want to see. 'Straight Wheat' too, but there's not a lot of that around.

If you don't see 'straight' on the label, either find out why, or simply move on.

Quincy Street Distillery Is On Its Way to Somewhere

If you're going to start a micro-distillery, try to put it in an attractive older building in an attractive older part of an attractive older suburb of a major city. Visitors can be crucial to a distillery's success. Jack Daniel's and Jim Beam know this and so does Quincy Street Distillery, a new micro located in historic Riverside, Illinois.

When you think about your visitor experience, remember that it begins long before the guest crosses your threshold. That industrial park may have practical advantages for you and your employees, but it probably wasn't designed by Frederic Law Olmstead. Downtown Riverside was. Your customers will be much more likely to enjoy your place and your products if they've already begun to enjoy themselves before they get there.

Quincy Street is very new and very small but they have some interesting ideas about using old recipes and using their town and its history for inspiration. They sell a white whiskey, a lightly-aged bourbon and rye, a gin, and some unique spirits. Every product has a rich back story. At this point you can mostly get them at the distillery, but last month they got a distributor.

Sure, Daniel's has Lynchburg, but one thing the giants can't do is provide an intimate and idiosyncratic experience tied closely to a particular place. That's where micros such as Quincy Street have an advantage.

(Pictured: Owner Derrick Mancini and distiller Daniel Maguire.)

Kansas Clean. What Is This Stuff?

"Kansas is a new whiskey for new whiskey drinkers," says the ad, replete with pictures of attractive 20-somethings and at least one unattractive geezer. Kansas, aka 'Kansas Clean,' aka 'Kansas Clean Distilled,' is a distilled spirit product that has been around for about a year. It is the first product from a company in Rochester, New York (not Kansas), called Fabulous American Beverages.

They want $30 a bottle for it.

The bottle is clear and the product inside is clear too, so how can it be whiskey? Doesn't whiskey always have to be aged? Haven't dozens of micro-distilleries, and at least one giant (Jack Daniel's), gotten into trouble with federal regulators for trying to call an unaged grain spirit whiskey? Then what's this stuff?

Spirit whiskey.

What's that? Well, under U.S. rules, 'spirit whiskey' is a distilled spirit that contains at least 5 percent whiskey, with the remaining 95 percent neutral spirit, aka vodka. The whiskey component can be anything that meets the legal definition of whisky, so it can be very nearly neutral and very lightly aged itself.

The very hip/now/with-it Kansas web site tells you none of this.

The spirit whiskey classification exists because right after Prohibition there was so little fully-aged whiskey available, and whiskey was what people wanted, that the feds accommodated producers by creating categories of 'whiskey' that were mostly vodka.

That way, producers could stretch what little whiskey they had and still give people something with a little bit of whiskey character.

In the intervening years, and especially after the 'light whiskey' fiasco of the late 1960s, it became conventional wisdom that no one wants a whiskey that is barely there. Drinkers who want a neutral spirit buy vodka, which is the largest distilled spirit category. There is very little demand, seemingly, for a slightly non-neutral spirit with a modicum of whiskey character. At least there is very little demand for a spirit with less whiskey character than Canadian Mist or Seagram's 7 (the Bud Lights of whiskey).

That is, until now. Whiskey is now hip. There are, or so the makers of Kansas believe, many people who want to drink vodka but say they're drinking whiskey. They don't so much want the very slight whiskey flavor that (at least in theory) differentiates the product from vodka, as they are willing to tolerate it for the privilege of calling it whiskey.

In the rest of the world this isn't an issue, because following the guidance of the Scotch Whisky Association and the lead of the European Union, their rules say whiskey must be aged for at least three years. In the U.S., whiskey has to be aged, but no minimum duration is stated and products that contain as little as five percent whiskey are able to call themselves whiskey.

The rules are written to protect consumers but also to accommodate producers. In this case, both probably would be better served if the 'spirit whiskey' classification was abolished. Sorry, Kansas. (Not really.)

Diageo Loses Cuervo to Proximo

This has little to do with whiskey directly, but it's a big news day for people who follow the distilled spirits business, and anything that shakes up the industry this much is bound to affect whiskey at some point.

Today The Big Galoot (my pet name for Diageo) got a little smaller, as the other shoe dropped in the ongoing saga of Diageo and Jose Cuervo Tequila in the U.S. market.

Here's the synopsis of our story thus far. Jose Cuervo is far and away the best selling tequila in the U.S., fluctuating in recent years between 3.5 and 3.9 million cases, and trending down. Diageo doesn't own Cuervo, it's merely the distributor, and that contract ends June 30. Diageo tried to buy Cuervo from its owners, the Beckmann family, but that fell apart in December.

So the question has been, what's next for Cuervo? A new distribution deal with Diageo? Someone else? A sale to someone else? Or self-distribution?

Five years ago, the Beckmanns established a distribution company in the U.S. called Proximo Spirits, which sells 1800 Tequila, 3 Olives Vodka, and other small brands. Taking on Cuervo will more than double Proximo's size, so that was by no means a sure thing. It is, however, the choice announced today.

Proximo's only whiskey property is Stranahan's Colorado Whiskey, which is tiny compared to Cuervo but probably the biggest micro-distillery whiskey in the country.

Diageo, meanwhile, will fight back by promoting its other tequilas, principally Don Julio. The other challenge for Cuervo is the current glut of inexpensive, 100%-agave tequilas on the market. The other story this may impact is the ongoing speculation that Diageo will make a play for Beam Inc. Jim Beam itself is the prize, but does the fact that Beam owns Sauza, the #2 tequila, make such a move more or less likely? Only time will tell.