Tuesday, October 26, 2021

ADM Sells Storied Peoria Distillery to BioUrja


Hiram Walker Peoria in the 1940s.

The Peoria JournalStar reported it like this: "After almost 40 years, Archer Daniels Midland Co. no longer will be the primary firm that produces ethanol in Peoria. Instead, a Houston-based company will take over the dry-mill ethanol plant ADM has operated since 1982 at the foot of Edmund Street along the Illinois River."

The new owner is BioUrja, an international supplier and trader of commodities such as biofuels, petroleum products, natural gas liquids, electric power, metal alloy tubing, grain, and animal feed products. 

ADM is reducing its ethanol capacity to redeploy that capital more profitably elsewhere while BioUrja is excited about diversifying its biofuels business into higher-value distilled ethanol products such as beverage and industrial alcohol, the Peoria plant's specialty. This comes on the heels of another major neutral spirits distiller, Kansas-based MGP, moving itself up the value chain by acquiring Luxco.

Peoria and the nearby town of Pekin were once whiskey producers on a scale that rivaled Kentucky. The infamous 19th century Whiskey Trust was based there. The distillery BioUrja is buying used to make whiskey, and a lot of it. ADM bought it and converted it to neutral spirit production in 1982. The seller then was Hiram Walker, a Canadian distiller best known for Canadian Club. 

Hiram Walker was a 19th century Detroit grocer who owned a distillery across the border in Canada. He always intended to sell his products primarily in the United States but located the distillery there because he anticipated Prohibition. In so doing, Walker introduced Americans to the lighter Canadian style of whiskey. Because of Detroit's proximity to the Canadian border, Walker's plant supplied a lot of whiskey to the U.S. market before, during and after Prohibition.

Canadian law officially did not permit the export of spirits into the U.S. market during Prohibition, but row boats would show up daily at the Walkerville docks, declare their destination as “Jamaica,” and be sent on their way loaded down with all the whiskey they could carry. 

The Walker family owned the distillery until 1926, when it was acquired by Harry Hatch, a Canadian entrepreneur who started out with a small liquor store in Whitby, Ontario. 

When Prohibition ended in 1933, Hatch's Hiram Walker and Sons, Inc. decided to reenter the newly-legal U.S. market in a big way. Their Peoria distillery was the largest in the world and made Walker’s DeLuxe and Ten High, both straight bourbons; Imperial Whiskey, a popular blend; and other Hiram Walker products.

That distillery's predecessor on the same riverfront site was Joseph Benedict Greenhut's Great Western Distillery, built in 1881. The production of whiskey and neutral spirits was booming in Peoria and each new distillery was bigger than the last and, therefore, the biggest distillery in the world.

Six years later, Great Western and 65 other distilleries merged to form the Distillers & Cattle Feeders' Trust, popularly known as the Whiskey Trust. Greenhut became its president.

The Trust used its resources to buy more distilleries, many of which it closed. The idea was to limit production industry-wide to reduce competition and protect profits. Although the Trust was technically legal (it would not be today), it engaged in many illegal practices such as intimidating any distillery owners who did not want to sell.

That was Peoria then. The Peoria Historical Society's "Roll out the Barrel" Tour focuses on Peoria’s years as “Whiskey Capital of the World.” Peoria's Bradley University has a collection of interviews and other records in its Cullom-Davis Library. That's appropriate since part of the Bradley family's wealth came from the alcohol business. 

As you come into Peoria from the north you see it, where once there were distilleries as far as the eye could see. There is still one, the big one. It's still converting corn and water into alcohol, as they have done on that site for more than 150 years. There's just a new name above the door.


Richard Turner said...

Rowboats laden with whiskey on the Detroit River... bound for Jamaica? HA! That conjures a very comical, yet I'm sure very accurate picture, during the "Good Old Days" of Prohibition; gangsters and rumrunners: gotta love it.
Thanx for that mental image, Col. Cowdery!

David P. Jordan said...

Hopefully, BioUrja will use the Peoria plant's capacity. An adjacent grain terminal and barge loadout will also likely be included in the sale. A 3.1-mile riverfront railroad that once belonged to the Rock Island, might also come with the deal.

Chuck Cowdery said...

You sound like a local, David. Please, keep us posted.