Friday, June 3, 2016
Who Makes America's Whiskey?
In Bourbon, Strange, published just two years ago, I wrote that, "the industry is very concentrated, with just eight companies distilling all of America’s whiskey at thirteen distilleries."
It is now ten companies and 15 distilleries.
Then and now, micro-distilleries are excluded. Nothing against them. They are out for two reasons: (1) There are too many to keep track of. (2) They have virtually no impact on industry volume because they are so small.
To accurately portray the industry today requires, first, a new definition of who I will count. New since 2014 is the emergence of what I call 'mid-majors.' These are distilleries that are still much smaller than the thirteen on 2014's list, but their output is significant. Let's put the threshold at 500,000 proof gallons per year.
Only distilleries currently in production at or above that level are included. Several more will come on line this year and even more are scheduled to start up in 2017.
The companies that operate more than one distillery are first, with the number of distilleries they operate in parens. All of the rest have one each and are in no particular order.
Beam Suntory (3)
In Kentucky, Beam Suntory operates three whiskey distilleries, a bottling and aging site at a silent distillery, and several other satellite aging sites. They are Kentucky’s biggest producer. Two of their distilleries, Clermont in Bullitt County and Booker Noe in Nelson County, are branded as Jim Beam. The third Beam plant is Maker’s Mark, at Loretto in Marion County.
Brown-Forman (3)
Brown-Forman makes whiskey at two distilleries in Kentucky and one in Tennessee. The Tennessee distillery is Jack Daniel’s in Lynchburg. The Kentucky distilleries are Brown-Forman in Shively and Woodford Reserve near Versailles.
Sazerac (2)
Sazerac has two American whiskey distilleries, both in Kentucky. They are Buffalo Trace in Frankfort and Barton 1792 in Bardstown. They also have a large aging complex and bottling house in Owensboro, a micro-distillery in Virginia, and several other facilities.
Kirin
Kirin's distillery is Four Roses in Lawrenceburg, Kentucky. They also operate an aging and bottling site at Lotus.
Campari
Campari's distillery is Wild Turkey in Lawrenceburg, Kentucky, with remote aging sites at Camp Nelson, and adjacent to Four Roses.
Diageo
Diageo operates the George Dickel Distillery in Tullahoma, Tennessee. It has an aging site at Stitzel-Weller in Shively, Kentucky.
Heaven Hill
Heaven Hill’s distillery is in Louisville but the company’s roots—along with its corporate offices, bottling house, and most of its rackhouses—are in and around Bardstown.
MGPI
MGPI, based in Kansas, operates the old Seagrams Distillery in Lawrenceburg, Indiana, which it calls MGP of Indiana.
Michter's
The Michter's Distillery is south of Louisville in Shively. It started producing in 2015.
New Riff
The New Riff Distillery is in Newport, Kentucky, just across the Ohio River from Cincinnati. It started producing in 2014.
Update 6/4/16
Just learned that I overshot with New Riff. They are at 450,000. Close but no cigar. If I missed anyone who is above 500,000 proof gallons of whiskey production per year, I hope they will let me know.
Update 6/6/16
New Riff re-ran the numbers, bringing them up to 500,000.
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13 comments:
Great post, Chuck. Informative. Succint. But the things you DON'T say speak loudest here. You point out that the growth in volume is floating an expansion in the number of major players making Bourbon. That's a sea shift in Bourbon production - and the new players would seem to be the main focus of your piece. But you hardly say anything about the two new distilleries on the list (although you certainly have elsewhere). You give a lot more detail in this piece about the bigger players at the top of the list. Based on column inches your point really seems to be that the list isn't much changed at all. You take some pains to explain why you don't include craft distillers - and I understand the argument based on mathematics. But both of the new distilleries breaking onto your list are recent startups and there are more of those in the pipeline. There are also craft distilleries with projects to ramp up production in the works. Michter's and New Riff are part of a trend where the explosive growth in craft whiskey - and new startups start chopping up your line of inclusion - which makes it look like an increasingly irrelevent observation.
The ADI defines "craft" distilling at 100,000 proof gallons per year. But there are a number now producing more - prompting a conversation about how relevent that definition is any more. How many 100,000+ proof gallon craft distilleries does it take to make your line of inclusion move to that level?
There are parallels here to the craft brewing movement. There are some good whiskies coming out of craft distilleries. It wouldn't surprise me to see some of them successfully ramp up production and compete successfully in the market. We are beginning to see this happening. That's the real story with the change to the list.
Chuck, you're hysterical. You pooh pooh the craft distilers, yet they are the only reason the big distilleries are thriving and now multiplying. No-one on the planet earth , except for the alcoholics who make up the majority of profits of big whiskey, (look it up) gives a crap about these same old few distilleries who produced their same old product 10-15 years ago, and have it sitting out back.
What they care about is the new brands that craft distilers have created, and in many cases by buying this same old stuff and reworking or relabeling it, plus the Potemkin labels that the big brands are pretending to produce.
The public at large is still a little behind the curve in understanding what craft is, so they are currently falling for the game, it will change as time goes on, and much like big beer is dying off, so will big whiskey.
The big guys can ride the train for a while longer,but it too shall fail as more real craft come on line, and better articulates their position.
Oh. I expected KBD to be here. How much are they distilling right now?
Rock Town distills and ages the best bourbon in Little Ole Poor Arkansas. Their volume is infintessimal but they are playing as Ralfy Mitchel says a much longer game.
@Anonymous - Chuck is sort of right about most "craft" operations. The big difference that is there between craft beer and craft whiskey is that the majority of craft whiskey producers game the aging process enough (small barrels, etc., for a very short amount of time) that they simply don't produce a quality product. The big boys in Bourbon never stopped making a quality product (unlike big beer), it was more that people's tastes shifted towards lighter spirits for a while, and have now shifted back.
The idea that they'll fail as a result of craft, as you state, is the real hysterical comment here.
Ok, I am confused. how did michters and new riff make the list? they are certainly no big deal, volume wise....
Rick
If you add up all the craft guys they don't add up to the volume of just one of the original 8 on this list. Plus, there is not ONE craft producer that has soon success outside their local area. Or one that is doing it the right way...it takes so much time to perfect your craft and then build up the volume to be meaningful. So Chuck is really stating those producers that have a national influence on the marketplace. I would argue that Riff should not be on this list.
Plus, it is funny that Craft guys think they can just start doing this, and perfected the process the first time around. It is impossible for even a seasoned Master Distiller to create the perfect mash bill, know how their yeast will break down those carbohydrates, the perfect tempartures for their stills, and then know exactly how their aging facility will age the whiskey. Almost laughable they claim they can do it....
Unlike Craft beer, who was replacing a gap left by big Beer in high quality beer, it is not the case in Whiskey. The "Big" distillers were/are winning GLOBAL awards before, during and after the Craft Distillery industry peters out. People who don't understand, that having decades of experience and millions of barrels lets you do all kinds of unique things that are even more unique than a craft distiller.
Someon that is just making a rye or bourbon whiskey cannot dream of perfecting it after one try. The jimmy Russell's, Booker's, Beam's, etc. all would admit their first and probably several attempts at new things failed!!!!
There is a reason those guys are legends! We use the word Master Distiller to much these days!!!
"...craft distillers... are the only reason big distilleries are thriving..."
What?!
Try backing up about 15-20 years and you'll see whiskey picking back up before any crafts were operating.
Mark,
You're absolutely right. One fact that is often ignored in the craft beer vs. craft whiskey markets is the fact that because of whiskey's aging process, it's often the CRAFT distillers that have to game the system/cut corners to get out a product in a reasonable time and for much more than the big boys are selling their products for. Craft beer was always more than macro beer, but the price difference wasn't so significant that it hampered sales. Aside from saffron and truffles, time is one of the most expensive things you can put in a product, which is why I enjoy a $20 bottle of Wild Turkey as much or more than most $50 bottles craft whiskey.
Furthermore, macro brewed beer had gotten very homogenous, and all of the big players were one style of beer. This opened up a huge avenue for craft brewers to bring all kinds of styles to the market largely ignored by the big boys. Since bourbon itself is a fairly narrowly defined product, the craft bourbon distillers (generally speaking) haven't been able to bring as much innovation to the product as craft brewers who brought dozens and dozens of styles of beer to market not being produced. Some of the craft whiskey distillers have brought some innovation to market (e.g. Corsair using non-traditional grains), but it pales in comparison to craft beer, where a single brewery easily makes 20-25 different beers at minimum that are styles completely unrepresented by the big boys.
Anonymous, to say that the reason the big distilleries are thriving is completely devoid of reason or knowledge of the history of the Bourbon Renaissance. There would be no huge uptick in bourbon sales without the increase in sales from the big players. Because of the time required to make bourbon, craft distillers would have never gotten into the game if the market was what it was in the 80's & 90's. You don't start making a product that takes a minimum of 6-12 mos. to get to market if there's no money to be made selling it. It also completely ignores the fact that most of these small distilleries got famous selling juice made at the big distilleries, so even the market increase driven by a lot of these producers has been fueled by juice made at the distilleries you're claiming had nothing to do with it.
Nobody wants the craft whiskey, at least compared to the established brands. It's either young and overpriced, or sourced and overpriced. I know a lot of folks who have bought a bottle of craft whiskey. I know very few who have finished that bottle and bought another.
This guy gets it. I might buy craft whiskey when I've got money but who can tell me they would rather have a bottle of Hudson baby Bourbon over a bottle of Russels Reserve? It's different. But is it worth so much more for a story? Why? And anyone that believes that "craft" whiskey is better than what's being made at Buffalo Trace is drinking something strong, hot, and young.
Do you need to add Bardstown Bourbon Co at this point?
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