Thursday, April 28, 2016

Here Is the Scoop on Jim Rutledge from the Man Himself

Rumors about Jim Rutledge have been burning up the interwebs for the last few days. Today, he revealed his plans. To get right to the heart of the matter, click on "Jim's Message" and watch the video.

Just in case you don't know, which is hard to imagine, Rutledge was Master Distiller at Four Roses Distillery for nearly 21 years. He has been in the distilling business for 50 years, most of that with Seagrams and its successors, until Four Roses was sold to Kirin in 2002. He started out at Seagram’s Calvert Distillery in Shively (a Louisville suburb).

Rutledge was inducted into the Kentucky Bourbon Hall of Fame in the inaugural class (2001) along with Parker Beam, Lincoln Henderson, Elmer T. Lee, Fred McMillen, Booker Noe, Jimmy Russell, and Bill Samuels, Jr. He served on the Board of Directors of the Kentucky Distillers Association for 13 years and on the Board of Directors of the Kentucky Bourbon Festival for 9 years – the last 7 years as Chairman.

Without his advocacy, it is possible Four Roses Bourbon would never have been re-introduced into the U.S. market. His initial argument was that they should at least sell it in Kentucky so the people who made it could buy it. He then led the brand's re-launch into all 50 states, in the process visiting most of them as brand ambassador.

His partners in the new venture are a lawyer and a finance guy, both of whom are industry veterans.

They plan to raise some of their capital through crowdfunding, but that site won't go live until next week.

Monday, April 25, 2016

We've Got Trouble, Right Here in Derby City

Jay Blevins is missing.

The 41-year-old former co-owner of Louisville's Derby City Spirits (formerly Derby City Shine) is accused of stealing thousands of dollars by renting out an event space at the distillery he no longer owns. He has been missing for several weeks and no one seems to know where he is.

Last September, Blevins and partner Harrison Hyden were in trouble for distilling without the necessary state and local licenses. A year before that, it was all upbeat as Blevins and Hyden looked set to revitalize a shuttered bar in Phoenix Hill, a long-popular Louisville entertainment neighborhood that has seen better days.

It was a large space and they had big plans for it. They said they would be the city's first craft distillery featuring a full line of spirits, including vodka, rum, gin and flavored 'moonshine.' All of their spirits would have a cane sugar base. Plans included an event space, bar, 'mock' casino, and retail store. It all seems faintly preposterous now, in light of the collapse, but even a year ago coverage was glowing in the local press.

Earlier this year, when Blevins and Hyden were unable to sort out their licensing issues, they sold the business to one of their investors. Blevins, meanwhile, started to take deposits to rent the distillery's event space, even though he no longer owned it, and it still didn't have the necessary permits. He still had keys to the place and showed it to people who paid up to $2,500 to rent it for wedding receptions and other events. Catering, he told them, would be handled by a nearby restaurant. When people began to show up for their events only to find the space locked, Jay Blevins took off.

All of that was bad enough, but now with the police involved and the local press taking a hard look, things have begun to get really weird.

In Louisville, Blevins left behind his business partner as well as his fiancée and their newborn son. Since 2009, when he moved to Louisville and started to work at Buckhead Mountain Grill, a chain restaurant with two Louisville-area locations, everyone knew him as Jay, only that isn't his real name. He is really Benjamin Blevins, brother of the real John 'Jay' Blevins, who still lives in Tennessee where they are both from. The real Jay Blevins has made several criminal complaints against his brother for identity theft.

You can understand why Benjamin Blevins might want to pose as his law-abiding brother. Benjamin Blevins has a string of criminal arrests and convictions in both Tennessee and North Carolina, including check kiting, money laundering, breaking and entering, forgery, possession of stolen goods, and...well, you get the picture.

In retrospect there were probably signs. The distillery plans seemed both vague and overly grand. With dozens of craft distilleries opening left and right, the template for doing it legally seems pretty well known. Maybe friends should have become suspicious when he spelled his name 'Blevenzze' on his Facebook page.

So far, only Blevins is accused of any wrongdoing. Everyone else seem to have been taken in by a 'good guy' who seemed to be a hard worker. The new owner still hopes to make the business a reality. We will see but, clearly, the Derby City name deserves better.

Friday, April 15, 2016

Are Whiskey Warehouses 'Agricultural'?

Warehouses at the Willett Distillery (Bardstown) back in the day.
The Lexington Herald Leader reported Wednesday that Brown-Forman wants to build twelve bourbon warehouses near Midway on land zoned for agricultural use. This raised the question of whether or not bourbon aging is an agricultural pursuit. The site is in Woodford County and would serve Brown-Forman's Woodford Reserve Distillery. The warehouses will be built over a 12-year period. When completed they will have a capacity of 900,000 barrels.

Before it can go forward, the proposal must be approved by the Woodford County Board of Adjustment, which has forwarded it to the county's Agricultural Advisory Review Committee. Some members have expressed skepticism. “It does seem kind of a stretch to call the making of bourbon an agricultural enterprise,” said one of them.

Bourbon warehouses can be built close together in an industrial park or other places zoned for industry, but a site with lots of land where the buildings can be widely spaced has advantages. It is safer from the standpoint of fires, and good for the whiskey because of better air circulation. A rural site with few neighbors avoids complaints about the inevitable harmless black fungus that always grows near whiskey warehouses. Using land zoned for agricultural use also has tax advantages.

If bourbon aging is not an agricultural activity, it would be equally hard to call it an industrial activity. No processing is done on the whiskey in the warehouses. No machines are involved. There are no moving parts. Rural warehouses, unlike urban ones, have no climate controls beyond opening and closing the windows. Putting new barrels in and taking mature barrels out is just about the only activity.

If bourbon aging is not an agricultural use, it is certainly compatible with such use. At the Four Roses warehousing site at Cox's Creek, cows graze on the grass between buildings.

When Kentucky was a major producer of tobacco, nobody argued that tobacco warehouses were not an agricultural use.

The reality is probably that bourbon aging is a unique land use, not anticipated in normal distinctions between agricultural, industrial and commercial classifications. If any state can sort that out and accommodate it correctly, that state should be Kentucky.

As a footnote, this is another example of the fine job the Lexington Herald-Leader does covering the state's whiskey-making business. They are the best in the state.

Wednesday, April 13, 2016

New Bourbons from Brown-Forman and Beam Suntory Emphasize the Role of Wood

Brown-Forman is the only major American whiskey distiller that also owns cooperages and makes all of its own barrels, a fact celebrated by its new bourbon, Coopers' Craft. Beam Suntory buys barrels from Independent Stave Company and others, and had to buy twice as many to make its new bourbon, Jim Beam Double Oak.

Brown-Forman's last new bourbon brand was Woodford Reserve, launched 20 years ago. Made at the Brown-Forman Distillery where Old Forester and Early Times are also made, Coopers' Craft has its own unique mash bill of 75 percent corn, 15 percent rye, and 10 percent malted barley. That is a little less rye than the Old Forester/Woodford Reserve recipe (18 percent) and a little more than Early Times (11 percent).

But that's not what Coopers' Craft is about. It is, instead, "a celebration of barrel-making and a recognition of the importance of wood when it comes to crafting bourbon. In addition to being matured in barrels raised by master coopers at the Brown-Forman Cooperage, Coopers’ Craft is crafted using a special beech and birch charcoal filter finishing process, creating a smooth and flavorful bourbon."

Do you think they want to position this as a craft whiskey?

The Coopers' Craft neck label describes it as "Toasted Wood Whiskey," but the press release is silent about what that means. An inquiry produced this explanation: "Toasted wood whiskey is the result of Brown-Forman Cooperage’s proprietary process during which we toast the staves ahead of charring."

Although it is not always done, stave toasting is nothing new. It involves heating the wood enough to change its characteristics without setting it on fire, which is the charring process that comes later. Something must be unique about how they toast the staves that is 'proprietary,' which means "we're not telling."

Similarly, charcoal filtering just prior to bottling is an almost universal practice, not to be confused with the Lincoln County Process used at Jack Daniel's, which involves new make distillate before aging and a lot more charcoal. Charcoal filtering just prior to bottling, usually called 'chill filtering' because the whiskey is chilled as part of the process, is intended to prevent 'flocking,' aka 'chill haze.' It is often criticized as removing flavor for a merely cosmetic benefit, but Brown-Forman says it makes Coopers' Craft more flavorful. They are also the only producer to name the woods used for their finishing charcoal. Beech, by the way, is the wood Budweiser claims makes its beer so good.

When it goes on sale this summer, Coopers’ Craft will be available in Alabama, Florida, Georgia, Kentucky, Louisiana, Mississippi, South Carolina and Tennessee. In part, this may reflect where Brown-Forman's two cooperages are located, in Kentucky and Alabama. It will be 82.2° proof. Suggested retail is 28.99 for a 750ml bottle.

Jim Beam Double Oak comes in a little cheaper, at $22.99 for a 750ml bottle. What this is is Jim Beam white label, aged four years, that has gone into a second new, charred oak barrel for some 'proprietary' length of time. It tastes like a wood finish, not unlike Woodford Reserve Double Oaked or Maker's 46. The lab sample I tasted was 86° proof. Jim Beam Double Oak was released in the UK, Germany, and Travel Retail last month but they don't even have a COLA yet so look for it here perhaps late summer or fall.

Wood treatments are generally considered 'authentic' by enthusiasts and are not scorned like products that get their modified flavor by mixing the bourbon with another liquid. That said, Beam Suntory Americas President Tim Hassett just yesterday described Jim Beam Apple (a mixture of Jim Beam bourbon and apple liqueur) as "the most successful launch in the brand’s history."

One thing Jim Beam Double Oak tells us is that the Scots are paying high prices for used barrels right now. American distillers have little use for second-fill barrels except as a by-product. Most are sold to scotch producers. A whiskey such as Jim Beam Double Oak is only practical if the difference is small between the cost of a new barrel and price being paid for used ones.

Both companies are to be commended for introducing new products in the sub-$30 price segment. Coopers' Craft is Kentucky Straight Bourbon Whiskey without qualifications. Jim Beam Double Oak is Kentucky Straight Bourbon Whiskey Finished in Oak.

Sunday, April 10, 2016

The Golden Age of American Whiskey? You're Living in It

A small subset of whiskey enthusiasts are 'dusty hunters.' Since whiskey keeps in the bottle indefinitely and some retailers have lax inventory controls, the odd bottle or two can sit on a shelf gathering dust for decades. Often these finds still bear their original price tags.

Dusties are also found at estate sales and in the liquor cabinets, or under the kitchen sinks of elderly relatives after their demise.

Especially prized are bottles believed to have originated at long-closed distilleries. Favorites include Stitzel-Weller in Shively (Louisville), National's Old Grand-Dad Distillery in Frankfort, and Heaven Hill's distillery in Bardstown. Some of the best I've tasted came from Cummins-Collins in Athertonville.

Not surprisingly, some practitioners of this pastime declare these old bottles to be universally better than modern production. It's all very subjective, of course, as is this:

American whiskey has never been better, more plentiful, nor more diverse than it is now. We've never had better access to reliable information about what we're drinking and prices, all things considered, aren't bad. Producers large and small are innovating like never before. The Golden Age of American Whiskey? This is it. It's now. Thank your lucky stars and enjoy it.

That's not to take anything away from dusty hunting. It's fun and if you know what you're doing, some terrific drinks can be had.

What about those older bottles? Are they really better? Here's the thing. Although dusties can come from any era, a great many were bottled in the 80s and 90s. It just stands to reason that the most plentiful dusties are the most recent ones.

The 80s and 90s are known as the 'glut period.' When bourbon sales began to tank in the late 60s, most producers assumed the decline was temporary and would be brief so they didn't reduce production right away. As sales continued to decline, that excess (most of it still in barrels) continued to grow and move through the pipeline.

By the 1980s, there was so much excess whiskey in storage that producers were routinely bottling 8- to 10-year-old whiskey in their inexpensive mid-range NAS products. If you were drinking bourbon during that period or have had dusties from it, it is easy to reach the conclusion that whiskey then was 'better.' That phenomenon had nothing to do with how the whiskey was being distilled or aged, except for the length of aging. And that was unintentional.

And although it was a boon for drinkers, it was horrible for the producers. They were losing money hand over fist.

If we're suffering from anything now it's the opposite of that phenomenon, NAS products that are a little too young due to tight supplies of well-aged liquid. That will correct itself in short order, probably.

During the glut period, not a lot of new whiskey was made each year. Distilleries are like furnaces. They don't have variable speeds, they're either on or off. Back then, a distillery might operate for two months in each six-month season, four months for the year. Or it might go on hiatus for a year to 18 months. The long layoffs were hard on staff and sitting idle wasn't very good for the equipment either. I can't quantify exactly what effect that had on quality, but it can't have been good.

When your business is bleeding profits, you don't invest in the future and needed maintenance is delayed. When prices have to be cut, corners are cut too. Nobody enjoys coming to work.

Today, the business is healthy, new distilleries are opening, existing distilleries are investing, and everybody is working. It's exciting to be part of a robust, dynamic industry. Without question, the Golden Age of bourbon is right now. Enjoy it.

Friday, April 8, 2016

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.

Monday, April 4, 2016

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.