Thursday, August 21, 2014

Diageo's New Distillery to Bear Bulleit Name

Diageo held a groundbreaking ceremony today for its new Kentucky distillery in Shelby County and announced that it will make Bulleit Bourbon there. What's interesting is that the day this distillery opens, its namesake product will be selling more than its distillery can produce, based on estimates announced by Diageo.

One-hundred-fifteen million dollars just doesn't buy what it used to.

Diageo appears to be following the lead of rival Brown-Forman. Brown-Forman's Woodford Reserve has a beautiful, showcase distillery for the tourists, which makes some of the product. The rest is made in an unseen factory somewhere else.

At Brown-Forman's Jack Daniel's, tourists never see 90 percent of the warehouses. The bottling house and other functions are also hidden. They're not underground or anything, just several miles from the distillery and town proper.

Okay, it's also the Heineken model. The old brewery in Amsterdam that the tourists see produces little or nothing. The real brewery is several miles away.

The approach must work, as Woodford, Jack Daniel's and Heineken are extremely popular tourist destinations. But so is Buffalo Trace, where everything is visible and everything is made there.

There is one hitch in this theory. Diageo says the new distillery won't be open to the public. A visitors center might be built in the future, hinted Diageo North America President Larry Schwartz, but only if Shelby County voters vote the county wet. They have two years. The new distillery is supposed to open late in 2016.

In the meantime, Diageo is building a Bulleit Bourbon visitors center 40 miles away at the Stitzel-Weller Distillery in Louisville, where they make nothing. It is believed they age Bulleit Bourbon there that was made somewhere else, but they won't confirm it.

And that, dear friends, is Diageo.

Our friend Fred Minnick has a detailed report of the groundbreaking here.

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