Getting It Right the First Time

Finished last night after I got home from the Marty Stuart concert in Skokie.

I have a running joke with another writer on the whiskey beat. When we contrast our experiences with producers, she inevitably quips, "yes, but you're Chuck Cowdery."

That I am Chuck Cowdery is undeniable and one of the few privileges of being Chuck Cowdery is that I receive a lot of whiskey, unsolicited. I get so much that boxes may sit, unopened, for months. 

I write very few reviews. I don't find them useful, for me to write or for anyone to read. I especially don't review limited editions because they're usually so limited, or so costly, most people who read the review will never get to try them. What's the point?

Which brings me to the bottle pictured above. I have a long history with the Western Kentucky distillery now known as Jackson Purchase. I'm going to go into some of that history in a minute, but let's get to that empty bottle pictured above.

Most times, when bottles I receive are opened, I drink a little and move on to something else. Many of the samples I receive are in 200 ml bottles, or smaller. Even a lot of those don't get emptied, or I use them in cocktails. 

The point is, I have to really like something to finish a 750ml bottle of it, and I really like this Jackson Purchase bourbon. What is exceptional about it is this. It's not exceptional. No exotic finishes, fancy blends, or unique mash bills. It is a standard, rye-recipe bourbon. The only unusual thing about this release is the proof, 117.8° (58.9% ABV).

But being unexceptional makes it exceptional because this is the distillery's first release. They got it right the first time. Craig Beam is the master distiller at Jackson Purchase. His former employer, Heaven Hill, puts out whiskey this good every day, but they've been doing it for nearly a century. For most new distilleries, their first release is a little rough, a bit too young, or too harsh, or simply rough around the edges. It might be perfectly good whiskey and, hopefully, worth the price, but it's not everything it could be and probably will be when the distillery has a few years under its belt. 

The "wow" here is that they got it right, right out of the box.

So, now, some of that history.

Fulton County is as far west as Kentucky goes. It hugs the Tennessee border on one side and the Mississippi River on the other. Hickman is the county seat. It hosts about 2,500 souls. Just outside of Hickman is the distillery. It gradually emerged from a corn field beginning in about 2006. The glass-fronted still house is illuminated at night. 

Back then it was called the Fulton County Distillery. It was built by W. Ray Jamieson, a successful Memphis attorney. When I first wrote about it in 2016, I noted that although Jamieson was not a young man, he seemed in no hurry to finish his distillery. At that time it was more or less complete. He had retained the services of two Wild Turkey retirees, Curtis Smart and Donnie Sims, to run the place.

He had a 24-inch Vendome column, a 7,500 gallon mash cooker, four 8,750 gallon fermenters (with space for four more), and a 350 horsepower boiler. He had two wells with year-round cold water.

For even longer than he had been building his distillery, Jamieson had been collecting stills. "I tell people I'm lawyer turned honest bootlegger," he joked. Most are contemporary moonshine stills taken out of service by law enforcement. A few are hundreds of years old.

Jamieson envisioned a complete visitor experience at the distillery, with dining, lodging, and a museum featuring his stills collection. He predicted, not entirely seriously, that Hickman would become “the next Lynchburg.” Much like Lynchburg, Tennessee, it is not on the way to anywhere. 

After Jamieson, the place went through several owners, each with a plan to open it up and start making whiskey. None did. When the current crew took over, led by Beam and Terry Ballard, another veteran distiller, they did some upgrades and then, finally, threw the switch.

I'm not sure how widely available it is, but Jackson Purchase Kentucky Straight Bourbon Whiskey runs about $65 a bottle. 

America Should End Its Socialist Liquor System Now

 

Karl liked his brewski as much as the next guy.

According to etymologists, the word 'socialism' has its root in the Latin sociare, which means to combine or to share. To many on the political right, 'socialism' is a word they use to scare people, conjuring up the worse abuses of Soviet Russia, Castro's Cuba, or 'Red' China.

In the supposedly free United States of America, we have one very socialistic system, the way the government regulates the production, distribution, and sale of alcohol. The liquor business is struggling at present. That makes this the perfect time to free it from its socialist overlords, the 50 state liquor control boards and the distribution monopolies they enable.

The trouble began with the 21st Amendment, ratified in 1933, which ended National Prohibition. It is short and simple. The first section repeals the 18th Amendment. The third section gives states seven years to ratify (they took less than one).

The second section, necessary to obtain that ratification, is where the trouble lies. It says, "the transportation or importation into any State, Territory, or possession of the United States for delivery or use therein of intoxicating liquors, in violation of the laws thereof, is hereby prohibited."

That means individual states may regulate alcohol as they see fit, regardless of any burden on interstate commerce that would normally run afoul of the Constitution's Commerce Clause. They can't ban it altogether, but they can say what can be sold, and where and when it can be sold. They can set prices and, of course, tax the hell out of it.

Furthermore, if you take alcohol into any state in violation of that state's laws, you commit a federal offense too.

Most states have used this authority to create a mandatory three-tier system for the distribution of alcoholic beverages. The three tiers are producers, distributors and retailers. The mandatory part means no tier may be bypassed by anyone, including consumers who may only legally buy from state-licensed retailers. In most cases, these laws prevent cross-ownership too. Producers may not own interests in distributors or retailers, and so on.

If that isn't socialism, I don't know what is.

Everything said about these state laws will be "in most cases" because the 50 states each regulate alcohol differently, which all by itself is a significant burden on interstate commerce. We don't have one socialist liquor system; we have 50 of them.

Here is how it works. Imagine that instead of buying L. L. Bean clothes directly from L. L. Bean in Maine and having them delivered to your home you were required by law to buy them from a retailer with no connection to L. L. Bean, who bought them from a distributor who also has no connection to L. L. Bean but has an exclusive franchise from your state government to be the state's only legal source for L. L. Bean clothing.

Under this system, retailers who want to carry L. L. Bean clothing must buy their L. L. Bean merchandise from the sole distributor in the state who carries it, whose monopoly is enforced by state law. 

The state government, as well as the independent distributor and independent retailer, all have something to say about which L. L. Bean clothes are available to you and how much they cost. Will they offer every garment in every color and size that L. L. Bean makes? Maybe, but probably not. While you probably will have a choice of several retailers who may offer different selections, the monopolist distributor will control absolutely which L. L. Bean products are available to those retailers and thus to you. Unless a state border is nearby, you're out of luck.

And even if it is you may still be out of luck because that same distributor may have obtained the monopoly in the adjacent state too. If you find something there you like, you may be breaking the law by purchasing it there and taking it home.

Now imagine that on an out-of-state trip you have discovered a clothing manufacturer that is similar to L. L. Bean but a bit more suited to your taste. You return home only to discover that none of the state-franchised wholesalers choose to carry that line. Remember, you are only allowed to buy clothes at state-licensed clothing stores. You cannot legally buy clothing online or over the phone. Once again you are stuck. Damn socialists!

Although you may travel to where that other clothing brand is sold to buy it, that may at least technically violate state and federal law.

Let's assume for purposes of our example that clothing is not burdened with excessive taxes the way alcohol is. Even so, the lack of competition inherent in this state-run system makes its products more expensive than they otherwise would be. Maybe instead of a L. L. Bean polo costing $30 it costs $50. You'll get used to it.

Free markets, baby!

Alcohol consumers, to the extent they understand it, generally hate this socialist system. So, too, do most alcohol producers and retailers. You know who loves it? Distributors. 

The three-tier system of which America’s beverage alcohol distributors are so fond imagines them as relatively small, in-state entities, and therefore easily reachable by state courts and state regulators, which might have more difficulty getting the attention of a giant multinational corporate producer. In reality, distributors have undermined this purpose by using various corporate organizational schemes to become large, multi-state operations themselves, bigger than many producers. Although they comply with the letter of the law, most now operate across state lines. Some are large and powerful national businesses. They also have found clever ways around the laws intended to prevent them from owning alcoholic beverage producers and vice versa.

Despite their advantaged position, distributors feel threatened by the desire of alcohol consumers to legally acquire beverage alcohol products monopolist distributors refuse to make reasonably available to them in their states.

In particular, distributors want to strangle the direct-to-consumer movement in its crib. They fret about the Supreme Court’s ruling in Granholm v. Heald (2005), which said that the 21st amendment does not give states the right to discriminate in favor of in-state producers in violation of the Commerce Clause. That decision has not “opened the floodgates” of underage drinking and tax avoidance that was predicted by the president of the Wine and Spirits Wholesalers of America at the time. But since distributors still fear their privileges are at risk, they have repeatedly proposed legislation to strengthen their socialistic monopoly.

As the Court held in Granholm: “The aim of the Twenty-first Amendment was to allow States to maintain an effective and uniform system for controlling liquor by regulating its transportation, importation, and use. The Amendment did not give States the authority to pass nonuniform laws in order to discriminate against out-of-state goods, a privilege they had not enjoyed at any earlier time.”

America should end its socialist liquor system now.

To Everything There Is a Season and a Time for Every Purpose Under Heaven

 

That's a wrap.

Some of you figured this out before I did. The last post on this blog was August 4th, more than two months ago. I've never posted on a regular schedule, but two months is a long break. I knew I was wrestling with some things and didn't know what my next move would be. I don't have all the answers, no one ever does, but here is what I know now.

I am discontinuing The Bourbon Country Reader, effective immediately. The last issue was Volume 23, Number 2, dated June 2025. That's 134 issues over 30 years. It was a good run.

I am also getting out of the books business. I have liquidated all remaining copies of my 2014 book, Bourbon, Strange. I am no longer supplying Amazon with copies, but they have some in inventory. When they're gone, they're gone. I liquidated them to some of my industry friends, who will make them available in some form. I'll let them tell you about that.

Bourbon, Strange will continue to be available on Amazon as a Kindle e-book.

My other two bourbon books, Bourbon, Straight (2004) and The Best Bourbon You'll Never Taste (2012) will continue to be available, but only from me via PayPal, and maybe at some point via some of those friends mentioned above. Click on the links above if you're interested. As with Bourbon, Strange, both of them will be available from Amazon until their inventory is exhausted, and both will continue to be available as Kindle e-books.

When the current inventory is gone, that's it. I don't intend to reprint any of them. All three, as well as my blues book, Blues Legends (1995) are readily available from used book sources, though I'm told many used copies of Blues Legends don't include the CD, which is a shame.

The significance of the August 4th blog post to all this is that I stopped selling DVD copies of "Made and Bottled in Kentucky" a few years ago but only got around to digitizing it and putting it online on that date. I discovered I had, in fact, sold every DVD I had, and it took me a while to find the DVD master. I'm not, I'm afraid, very well organized. I feared it was lost. That started this whole soul-searching project. 

The documentary was made in 1992 and launched me on my bourbon journey. At this point it's a historical document in its own right, featuring interviews with Booker Noe, Elmer T. Lee, Dixie Hibbs (who died last week), and others who are no longer with us. The long moribund Kentucky whiskey industry was just beginning to show signs of revival. The 30+ years that followed saw American whiskey production and sales grow dramatically. While there is no reason to believe those gains will be lost, the much touted "bourbon boom" has ended. It was one hell of a ride.

Back to The Reader. Because I didn't know, back in June, that I was ending the newsletter, I sent renewal notices, and many people renewed their subscriptions. I don't intend to take your money without giving you something. In the coming months I will write and publish a series of essays. Every current subscriber, regardless of the status of your subscription, will receive all of them. I haven't written them yet, but I expect they will be about my bourbon journey of the last 30+ years. 

My intention is to make all Reader back issues available online in some kind of archive, but that's a future project and I'm not quite sure how to go about it. It's on the "to-do" list.

I also will continue to write the "Straight Talk" column in Whisky Advocate for as long as they'll have me.

As for "The Chuck Cowdery Blog," it's not going away. If I have something to say, about bourbon or something else, I'll say it here. I've been writing since I was in third grade, so that won't stop. That's who I am. Part of the reason for these changes is to clear the deck for what comes next, whatever that might be. In the interim since that August post, I had another birthday. I'm now 74-years-old. Some changes need to be made, not because I am stopping but so I can keep going.

So, I'll leave it there for now. I have more to say but I'll say it in those post-Reader essays, and I'll be here as well. Thanks for taking this ride with me. I'm not going away, just moving on.

"Made and Bottled in Kentucky" Is Now on YouTube

 

In 1991, in anticipation of 200 years of Kentucky statehood, which occurred in 1992, the Kentucky legislature appropriated money for the state's public television network, KET, to award grants to independent producers to create original programs about Kentucky subjects.

Although I had lived in Louisville for nine years, by 1991 I was living in Chicago but still spending a lot of time in Kentucky. As the French say, cherchez la femme. She was a photographer, and after visiting some picturesque distillery ruins, we thought about doing a coffee table book. She would take pictures, and I would write about Kentucky's unique whiskey culture. 

It wasn't like now. Bourbon sales were way down and nobody was writing about it.

The relationship broke up, ending the book idea, but I heard about the bicentennial grants and decided to submit a proposal for a documentary about Kentucky bourbon. My career to that point had mostly been writing and occasionally producing TV commercials and industrial films, so writing, producing and directing a TV documentary was not a stretch.

KET loved the idea, but their grant wasn't enough, so I submitted a proposal to the Kentucky Distillers Association (KDA). They had just received a grant from the Federal government for export promotion and gave some of it to me. I hired StudioLink, a video production company in Lexington. I was familiar with Jack Petrey, one of the owners, as a voice talent. He had a great voice with just enough of a Kentucky accent. Mike White was the shooter and editor, and Roger BonDurant did audio and lighting. The three of us were the entire crew and we crisscrossed Kentucky visiting every active distillery and most of the derelict ones. Roger is also a musician. He teamed up with Tim Lake, another Lexington musician, to create original music for the program. 

I appear only briefly (look for a green jacket) but I conducted all the interviews. Although not involved in this project, I often worked for Donna Lawrence Productions in Louisville and Donna's style was to do real interviews and build a script around that, let the experts tell the story. Today, many documentaries are fake, in that the interview subjects aren't answering questions, they're reading a script. Donna's style was not to start with pre-conceived notions as to what the story is. Let the authorities tell the story in their own words, then build a script around that, ideally with no narration. I couldn't do without narration altogether, but you'll notice that many of the interview segments are unusually long, compared to most modern documentaries. 

It was all shot and edited on 1" Betamax, which was state-of-the-art at the time, although it looks pretty crappy now.

And look who I got to talk to! Booker Noe, Jim Beam's grandson, in the living room of the house Jim Beam built. (Booker's son, Fred, lives there now.) I talked to Elmer T. Lee, Jimmy Russell, Jerry Dalton, Max Shapira, Bill Samuels, Ed Foote, Ova Haney, and many others. Bill, because he often appeared in ads for Maker's Mark, was the only one known to the public.

The U.S. economy was in recession in 1991-92 and the rest of my freelance writing business was suffering. Happily, this project was all-consuming, a lot of fun, and also paid some bills.

Everything I've done since then having to do with American whiskey sprang from that experience. 

"Made and Bottled in Kentucky" premiered on KET in June of 1992. It was subsequently syndicated and appeared on most public TV stations in the U.S. I'm told KET still plays it occasionally. I sold it on VHS for many years, then DVD, which ended in 2017. Since then, I've been meaning to make it available digitally and last week I finally did.

The Return of Buffalo Springs (Sort of)

 

Stamping Ground is a small town in Kentucky's Scott County (pop. 780). It is about 25 miles northwest of Lexington and eight miles from Georgetown, the county seat. Settled in 1790, it was named for the bison-trampled earth around a fruitful spring. 

After the herds left, that spring was turned to whiskey production. There was a distillery on the site for 100 years.

The last one, known as Buffalo Springs Distillery, was founded early in the 20th century. It sold a Buffalo Springs Bourbon, and another one called Boots and Saddle. It probably sold most of its output in bulk to brokers or rectifiers. 

After Prohibition the plant was substantially rebuilt, as pictured on the postcard above. The main buildings were limestone, a very traditional building material in Kentucky, but the design was modern with many large windows. Otis Beam, one of the seven distiller sons of Joe Beam, was its distiller. Local at first but owned by Seagram’s at the end, Buffalo Springs Distillery closed for good in the 1960s. 

Essentially abandoned, its buildings stood empty for the next 40 years. Like many distillery sites I visited in the 1990s, it felt like Kentucky's version of a European castle ruin. There were no fences or "keep out" signs. All the equipment was long gone and only a few walls still stood, including a grand one more-or-less intact at the front with no glass in its soaring windows. It reminded me of the "Highlander" movies, when the energy released by a Highlander triumph makes every nearby window explode.

The buildings are gone now but the spring still flows, and a few remnants survive. The site is now Buffalo Springs Park. One curious memento of the distillery is a concrete and rock structure adjoining several large, circular concrete pads. On September 12, 1935, the distillery held a burgoo party for the town and those concrete circles provided a firm base for massive pots of stew. 

Buffalo Springs was typical of the many small-town distilleries that once abounded in the region. It bought local corn, gave away livestock feed, and was one of the town’s few sources of non-farm employment. In the pre-Prohibition era, distilling typically didn't begin until after the fall harvest so many of those seasonal employees were the farmers whose corn was being distilled.

In its day, Buffalo Springs was a largely anonymous link in a production chain. It processed an agricultural product into a more useful and profitable commodity. It made a nice profit on the whiskey it sold as its own brands, less on bulk sales. It did not give tours. It did not have a gift shop. Although its time ran out, how many businesses of any kind reach the century mark?

When Buffalo Springs shut down, America’s entire domestic distilled spirits industry was contracting and consolidating. As it shrunk, no one expected distilleries like Buffalo Springs to return, but modern craft distilleries now play a similar role in many communities in Kentucky and throughout the country. In this they have followed the lead of small wineries and breweries, but with unique characteristics of their own. History doesn't repeat but it rhymes.

Is Kentucky's $9 Billion Bourbon Business On-the-Rocks?

 

What might have been? A brand new distillery, shuttered by its lenders.

Kentucky's best source for dependable bourbon news is the Lexington Herald-Leader, but they put some noses out of joint with a recent article about four unrelated but negative news events involving Kentucky distilleries. The article, and especially the headline, was criticized for being overly provocative and hyperbolic.

So why are we repeating it here?

For the same reason they did. Provocative headlines are intended to provoke you into reading the article or, in this case, subscribing to the newsletter that uses the Herald-Leader article as a jumping-off place for an analysis of the true state of Kentucky's bourbon business.

I won't even make you wait for the conclusion, since I've said this here and elsewhere. No, the bourbon business is not collapsing, but the so-called "bourbon boom" has slowed down considerably. The industry faces serious challenges. Most affected are the newcomers like Garrard County Distilling (pictured). They had barely begun to make whiskey when their lender shut them down.

The Bourbon Country Reader is a one-of-a-kind newsletter from the same source as this blog. But it is not the same content. The Reader is news, history, and analysis of American whiskey you won't find anywhere else. It is the oldest publication devoted entirely to American whiskey.

If you enjoy the writing you find here at The Chuck Cowdery Blog, there is a good chance you will enjoy The Bourbon Country Reader too when it arrives in your mailbox about six times a year. It is modestly priced and advertising free, unlike virtually everything else in your life. Subscribe now to rediscover the pleasure of old-fashioned words on paper, savored perhaps with a well-aged bourbon or rye.

The Reader itself is a bit of bourbon history. It debuted in 1994 with something like 17 subscribers. It has grown a little bit since then. The Reader has literally tracked the Bourbon Boom from beginning to now, when it seems to be entering a new phase. This new issue is #2 of Volume 23.

If you find yourself coming here, to the blog, for straight talk about the American whiskey industry, you probably should be reading The Bourbon Country Reader too.

Give it a try. A six-issue, approximately one-year subscription is just: 

$25 for mailing addresses in the USA. 

$32 for everybody else. (That is, addresses on earth but not in the USA. Interplanetary service is not yet available.)

The links above take you directly to PayPal, where you can subscribe securely using PayPal, Venmo, or any major credit card.

If you are unfamiliar with The Bourbon Country Reader, click here for a sample issue. 

Also in this new issue, we tell a story about one family's legacy at America's favorite distillery, and we look at the contribution corn makes to whiskey types other than bourbon.

The Deal that Made Me a Catholic

 

Mr. and Mrs. J. K. Cowdery, July 1, 1950.

My mother’s family was Roman Catholic and devoutly so. My father’s family was, as he described it, “vaguely Protestant.” They didn’t go to church and didn’t talk about religion. He had, however, been baptized Catholic at his mother’s insistence. She never took him to church either and divorced his father and left when Dad was six.

That baptism proved crucial when my parents married. They wanted to be married by a priest in her family’s parish church. Her family was not just devout but active in the parish. Her father was friends with the monsignor. Because Dad was baptized, he didn’t need to convert. He just needed to start following the rules. He had to become a practicing Catholic. Attending mass every Sunday was the main obligation. He wasn’t interested. So, the three men negotiated.

Each man had one non-negotiable position. Dad’s was that he would not pretend to be Catholic. Grandpa’s was that the marriage had to be recognized by the church. Monsignor’s was that Dad had to agree to baptize any children and raise them Catholic. Dad agreed so Monsignor allowed them to be married by a priest, though not by him, and not in the sanctuary. Instead, they were married by one of the parish’s other priests, in the house next to the church where the priests lived. 

At Grandpa’s direction, no pictures were taken of the ceremony. Instead, the wedding party adjourned to the front steps of the church and all pictures were taken there, and at the subsequent reception at a local restaurant. Grandpa understood optics.

No one was entirely happy, but everyone was satisfied, and the agreement held. Starting with me, the eldest, all six Cowdery children were baptized and attended the parish school. Every Sunday, our mother dressed us in our finest garb and sat us front row center. Dad attended sporadically. When my sisters were born, twins, staying home with the babies gave Dad his excuse to drop attendance to zero. 

I’m sure that relatively quiet hour at home did more for his spiritual health than any church service.

America's Craft Spirits Industry Grows Up

 

Denver's Leopold Bros is an example of a
successful, independent craft distillery.

Many new non-distiller producers want to become distillers, or at least say they do. Some eventually build or buy a distillery, but many don't. The term “non-distiller producer” (NDP) is not intended as a pejorative. It was coined merely to distinguish producers who distill from producers who don’t. There is nothing wrong with sourcing. It only becomes a problem when a sourcing producer pretends its products are something they are not.

For consumers, the ‘maker or faker’ question remains unresolved. You can’t reliably tell who distilled something just by reading the label. While some store clerks and bartenders can help, most can’t. Usually the answer can be found, but it takes at least a little work.

As more craft-distilled and craft-adjacent products came on the market, an infrastructure began to develop. Bill Owens was first with the ADI. In 2010, liquor industry veterans Dave Schmier and Marty Duffy launched the Independent Spirits Expo, a tasting event to bring small producers of all kinds glass-to-mouth with consumers and hospitality professionals. All small, independent producers were welcome. It was up to them to communicate what they meant by ‘produced,’ but transparency was encouraged. Begun in Chicago, it spread to New York.

Gradually, the existing whiskey expositions and tastings such as those produced by Whisky Magazine and Whisky Advocate Magazine began to include more small producers. Templeton, Whistle Pig, and Stranahan’s got some of their first national exposure exhibiting at those events. 

Today, drinks festivals of all kinds routinely combine products from large and small producers. The adage holds true. Consumers don’t care about producers; they care about brands.

In 2013, the American Craft Spirits Association (ACSA) was launched as a trade association for craft distillers. Existing trade groups, such as the Distilled Spirits Council (DISCUS) and Kentucky Distillers’ Association (KDA), created membership categories for small producers. Craft distillers in New York, Tennessee, Michigan, Illinois, and other states formed state associations or guilds of their own. 

In 2016, ACSA and its research partners released their first report on the size and economic impact of the craft spirits industry. The annual reports of the Craft Spirits Data Project (CSDP) draw a clear connection between craft spirits and job development, agricultural growth, and increased tourism. Its data is routinely cited in national business and trade journals. 

According to the most recent CSDP report, the number of active craft distillers in the U.S. grew by 11.5% over the previous year to reach a total of 3,069.

The ACSA defines “active craft distillers” as licensed U.S. distilled spirits producers who remove 750,000 proof gallons (or 394,317 9L cases) or less from bond. They market themselves as craft, are not openly controlled by a large supplier, and “have no proven violation of the ACSA Code of Ethics.”

As for sales, recent years have been challenging for the entire distilled spirits industry, including crafts. The most recent report is 2023 data. In that year, the U.S. craft spirits industry moved more than 13.5 million 9L cases, a decline of 3.6 percent compared to 2022. In dollar terms, the category reached $7.8 billion in sales, a 1.1 percent decline. Craft spirits also lost market share versus “legacy” producers, declining from 4.9 percent to 4.6 percent in volume, and from 7.7 percent to 7.5 percent in value.

One metric that increased in 2023 was employment. Craft distilleries in the U.S. had about 30,000 full-time employees in 2023, up seven percent from 2022.

Exports of U.S. craft spirits increased, reaching 179,000 9L cases, about a five percent increase. 

The declines, though small, hit hard because they are the first such declines since the CSDP began with 2015. Long range comparisons are perhaps more telling. Volume, which for 2023 was 13.5 million cases, was 4.9 million in 2015. Value was $7.84 billion in 2023, compared to $2.4 billion in 2015. That’s a 175 percent increase in volume over eight years, and a 267 percent increase in value.

ACSA puts the cut-off for ‘craft’ at 750,000 proof gallons per year. Within the craft segment, only a handful of producers release between 100,000 and 750,000 proof gallons each year, but they represent nearly 60 percent of the craft segment’s volume as measured by ACSA. 

Today, instead of a handful of giants, the distilled spirits industry has producers at every point on the size continuum. While the vast majority are small, the largest of the new producers are having a meaningful impact on overall industry capacity. Today, something like 15 companies make 90 percent of America’s whiskey at about 30 distilleries. A decade ago, it was 8 companies at 13 distilleries.

Once they became savvy lobbyists, craft distillers went after the law that had so infuriated their 18th century forbearers, the FET. In so doing, they undid a fundamental underpinning of U.S. tax policy for the last 232 years, the deliberate disadvantaging of small distillers.

In 2018, the Craft Beverage Modernization and Tax Reform Act (CMBTRA) lowered the FET from $13.50 to $2.70 per proof gallon for the first 100,000 proof gallons produced per year. Only a handful of U.S. distilleries produce more than 100,000 proof gallons per year. 

Due to expire on December 31, 2019, the rate was extended for one year, then made permanent in 2020. 

Although the CMBTRA represents a modest tax break for big producers, it levels the playing field for small producers.

Today you can regard the American distilled spirits industry as a small number of legacy producers still at the top (Brown-Forman, Sazerac, Suntory, Heaven Hill). Those giants still make most of the whiskey and other spirits sold. Below them are a growing number of smaller companies that did not exist 20 years ago.

We’ll end this review here. In some ways, “what is craft?” has become moot. Or, rather, it’s recognized as a subjective term having more to do with the way individual products are made, rather than the size of the producer. In some ways we have returned to the late 19th century, when there were thousands of producers, large and small, all over the United States. Consumers have many more choices, which is never a bad thing.

NOTE: This is part three of three. Part one is here. Part two is here.

The Rise of Craft Distilling and “Craft-Washing"

 

The former Seagram's Distillery in Lawrenceburg,
Indiana was the source of many "craft" whiskeys.

Craft distilling grew through the 80s and 90s, but slowly. It took off as the 20th century transitioned into the 21st. 

Other related phenomena were also occurring. Existing producers, now called ‘legacy,’ long moribund, finally saw exports grow in the late 1980s-early 1990s. By 2000, domestic whiskey sales were improving too. This was driven in part by growing interest in cocktails, especially pre-Prohibition and Prohibition-era cocktails that called for whiskey, often rye whiskey, a style that was nearly extinct. 

Consumers, especially young ones, were changing too, becoming more interested in locally- and artisan-produced products of all kinds, looking for variety and authenticity. Craft brews and brewpubs are everywhere now. Craft distilleries scratch the same itch.

When whiskey sales collapsed 50 years ago, it was in part because whiskey was viewed as an “old person’s drink.” It was a victim of the generation gap. By 2000, young adults didn’t know they weren’t supposed to like whiskey. They also didn't think "whiskey" automatically means "scotch."

America was ready for craft distilling.

In 2003, Bill Owens founded the American Distilling Institute (ADI) to encourage and support small distillers. Owens, from Northern California, came to distilling from craft brewing. He founded and ran one of the first brew pubs and eventually became a writer and publisher of brewing books and journals. 

Before he became involved in the beverage alcohol business, Owens was a well-known and highly regarded photojournalist/fine art photographer. In his most celebrated work, Suburbia (1972), he showed us the world most of us were living in as if we were seeing it for the first time. 

ADI was Owens’ post-retirement career. As with craft beer, he dabbled in the craft itself but mainly became a publisher and promoter, staging conferences, expositions, and hands-on workshops. Many craft distillery origin stories begin with attendance at an ADI event. 

With ADI, Owens had a new tool at his disposal that had not been available when craft beer was young, the internet. ADI hosted lively virtual discussions and information exchanges, welcoming participants from all over the world. A frequent topic: “what is craft?”

Owens approached craft brewing and, subsequently, craft distilling the same way he did his photography, with an evangelical zeal to share his often-unique personal vision. One of his first acts after launching ADI was to get in his car and drive to every new distillery he could find, taking pictures, talking to founders, and spreading the craft distilling gospel according to Bill. As time went on the industry would develop additional infrastructure, but ADI was first.

Back in the 17th century, the first American distillers made fruit spirits, then rum, and finally whiskey. The craft movement followed a similar trajectory. In addition to brandy, vodka opened doors for many but also caused problems, since it is so much easier and more profitable to just buy grain neutral spirit (GNS) rather than make it from scratch. Vodka is one spirit a factory can make better than an artisan.

At Greenbar in Los Angeles, Melkon Khosrovian and Litty Mathew showed that the best way to make ‘craft’ vodka is to buy GNS and put the ‘craft’ into natural and original flavor infusions. Others got to the same destination by making craft gin, similarly with sourced GNS but natural, often ‘estate grown’ botanicals.

Others glommed onto the fascination some people have with outlaw distilling, as dramatized on the “Moonshiner” TV shows. Legal moonshine, an oxymoron, found a market. The spirit itself is usually vodka, corn whiskey, cane spirits, or a blend thereof, often flavored and sweetened.

Inevitably, most distillers want to make whiskey. Some of the first craft whiskeys to catch the attention of enthusiasts were Old Potrero (Anchor) in California, Stranahan's in Colorado, Balcones in Texas, Hudson (Tuthilltown) in New York, and Woodstone Creek in Ohio.

Craft distilling’s sudden rise spawned a dark side known as ‘craft-washing.’ James Rodewald defined it in his 2014 book, American Spirit, as “labels designed to fool consumers into thinking that industrial products are coming from small, family-owned businesses.” 

As craft-washing spread, transparency became an issue every craft producer had to consider. “Are you a maker or a faker?” Savvy drinkers wanted to know.

When Templeton Rye debuted in 2005 with a mature rye whiskey, it was obvious they had not made it themselves, even though their packaging and marketing made it look like they did. They had a distilling license, but it is easy to look that sort of thing up and their license was brand new. The picture on their web site labeled ‘our still’ was clipped from a German still-maker’s catalog. Templeton’s President, Scott Bush, refused to admit he didn’t make the whiskey, nor would he reveal who did. 

Their story was that Templeton was the recreation of a famous rye whiskey made surreptitiously throughout that tiny western Iowa town during Prohibition and distributed all over the country by the criminal underworld. It was catnip for journalists. They even had a great-niece of Al Capone claim it was Uncle Al’s favorite.

The story never stood up to serious scrutiny, but the whiskey was terrific, a well-aged rye comparable at the time to Heaven Hill or Wild Turkey’s best. The origin myth might have been palatable if they had told it with a wink and a nudge, but they were always dead serious about it and engaged a whole town in their deception.

Eventually the Lawrenceburg, Indiana distillery now known as Ross & Squibb was revealed as the source. The whiskey, with an unusual mash bill of 95 percent rye and five percent barley malt, was created by Seagram’s as a blending whiskey. When the Templeton scam was exposed, Templeton settled several class action lawsuits for $2.5 million.

There is nothing wrong with bringing a product to market by sourcing whiskey. That has always been a way for entrepreneurs to create new products and brands. Just don't misrepresent it, especially to a customer who craves authenticity. We’ll talk about that more next time, as this looks like it will be at least a three-parter. If you missed it, part one is here.

The Obscure Origin of the Craft Distilling Movement

This booklet was published by the U.S.
Departments of Agriculture and Energy in 1982.

According to the American Craft Spirits Association, there are 3,069 active craft distilleries in the U.S. That number has grown about 10 percent per year for the past decade. 

Compare that to 50 years ago, when the number of licensed distilleries of all kinds in the United States, including industrial alcohol, fell to fewer than 100. Fewer than 20 of those made whiskey. Except for a few artisanal brandy distilleries, all of them were big. 

Before that, it was different.

The FET, the hated tax that sparked the Whiskey Rebellion, was repealed by Thomas Jefferson in 1802, reinstated briefly after the War of 1812, then reimposed in 1862 to fund the Union’s side in the Civil War. It has been with us ever since. 

With taxation came licensing, and larceny. The tax collection system was deeply corrupt from inception. Alexander Hamilton anticipated that, so he designed it to encourage large-scale over small-scale distilling. It would be more practical, he reasoned, to police a small group of large taxpayers rather than a large group of small taxpayers. He wasn’t wrong. Great Britain had experienced and addressed the problem the same way.

So, for the convenience of government, the beverage alcohol industry was pushed in that direction.

Even with that bias built into the system, the United States had thousands of licensed distilleries throughout the 19th century, and untold numbers of unlicensed ones. Until the second half of the century, whiskey-making was primarily an adjunct to farming or milling. Only after steamboats and railroads radically improved transportation did distilling evolve into an industry. 

In the late 19th century, there were still 6,000 to 7,000 licensed beverage alcohol distilleries operating in the U.S., many of them large even by modern standards. After 1900, as Prohibition picked up steam, the number of beverage alcohol distilleries rapidly declined until it reached zero on January 1, 1920, at least officially. 

Legal beverage alcohol distilling resumed on a small scale in 1929 to replenish dwindling stocks of medicinal whiskey. It resumed in earnest after Prohibition was repealed four years later. Many new distilleries were built in the 1930s. 

The reborn industry was not only licensed for tax purposes, but also heavily regulated for public health and safety reasons so, again, it was designed to favor large-scale producers and distributors and discourage little guys. 

This time it succeeded. Little guys were duly discouraged. After 1933, there were never more than a few hundred licensed distilleries in the U.S., almost all large. What small distilleries there were usually were attached to some other business, such as a winery or cidery that wanted to make a little brandy. 

Then came the Energy Crisis of 1973. As Americans became aware of their dependence on imported oil, the search began for domestic alternatives. Ethanol, which had powered some of the first automobiles, was an obvious option. Blends of gasoline and alcohol, “gasohol,” became a popular way to extend the petroleum supply using alcohol distilled from renewable, U.S.-grown feedstock, principally corn. 

In 1982, seeking to grow the still-nascent fuel ethanol industry, the U.S. Departments of Agriculture and Energy teamed up to publish Fuel from Farms, a Guide to Small Scale Ethanol Production. 

The Fuel from Farms initiative encouraged farmers to set up small distilleries to produce ethanol from their grain or other agricultural products. This did not threaten food supplies, it argued, because American farms had much more productive capacity than they used.

Farmers would control the process. They could reduce their own fossil fuel use by converting farm equipment to run on ethanol. That way they could become energy self-sufficient.

Fuel from Farms streamlined licensing and regulation but made a stern effort to exclude beverage alcohol from the equation. It didn’t work. The ‘fuel’ part never took off, but farmers and others got the simplified applications and lower fees extended to distilled beverage production as well.

The first to take advantage of this new opportunity were several West Coast winemakers who wanted to make fruit spirits, such as Germain-Robin, Jaxon Keys (Jepson), Charbay, Osocalis, St. George, and Clear Creek. St. George then got into vodka. Clear Creek got into malt whiskey. 

Also in the 1980s, the Justice Department relaxed antitrust enforcement leading to consolidation in many industries, including distilled spirits. The big got bigger and fewer in number. Soon Jim Beam absorbed National Distillers and the corporate roll-up that eventually became Diageo acquired American whiskey makers Stitzel-Weller, Glenmore, Medley, and Schenley. 

In theory, when any industry consolidates into a small number of large players, that creates opportunities for smaller, more nimble competitors. In distilled spirits manufacturing, however, the barriers to entry were uniquely high because of alcohol’s post-Prohibition tax and regulatory regimes. Add to that the unique capital requirement of aged spirits production. 

Although federal regulations had become less onerous, most states still had restrictions, so many early craft distillers became reluctant lobbyists. States such as California, New York, Tennessee, and Kentucky, that already had active distilled spirits industries, were easiest to crack. 

In Kentucky and Tennessee, for example, the ‘big guys’ had already gotten the law changed to allow limited direct-to-consumer sales at their distilleries, to take advantage of tourism growth.

Some states, in revising their laws, followed the model and rationale of Fuel from Farms and favored farm-based operations. One was New York, where Tuthilltown Spirits founders Ralph Erenzo and Brian Lee were surprised to learn it was easier to start a farm-based distillery than the rock-climbing resort they had planned originally. 

Successful lobbying efforts for craft distilleries always emphasize economic development benefits. Distilleries can complement a community’s existing agricultural, tourism, and hospitality businesses. They create new jobs and pay taxes, often at higher rates than other business types. 

Nothing motivates politicians like the promise of increased tax revenue. 

Craft distilling grew slowly through the 80s and 90s. It suddenly took off as the 20th century transitioned into the 21st. (This probably is part one of a multi-part series. Stay tuned.)

The New Unicorns: a $20 Handle

 

Screenshot from the Binny's website, 5/2/2025.

Traditionally in the whiskey world, a "unicorn" is a whiskey that is highly sought but rarely seen. Usually, the term is applied to high end limited releases like the Van Winkle line, Buffalo Trace Antique Collection, and other expensive expressions that seem to appear only on the secondary market, at prices many times their MSRP.

This is a different kind of unicorn, also highly sought but rarely seen, a handle (1.75 L) of excellent quality bourbon for $20 a bottle.

I call this to your attention not because I expect or want you to clean out Binny's, but because this is a good example of something we'll see more of, starting now, as everyone in the distribution chain looks to blow out excess inventory.

I've written about this particular bourbon before. Binny's is the biggest chain retailer in Illinois, with 46 locations. Clark & Sheffield is their house brand. The bottle I wrote about in August could be linked to Sazerac, but house brands can and do change suppliers. That's not important. The point is that a good, fully mature bourbon at $20 for a handle is my kind of unicorn.

This is not a unicorn you put on a shelf and admire. This is one you put on the countertop and drink.

I was browsing Binny's website to see what kind of bourbon bargains presented themselves. This one popped right out. I suggest you do the same with your favored retailers, perhaps more often than normal, because I expect we'll see more of this kind of thing. Right now, Binny's also has handles of Evan Williams and Jim Beam White Label for just $2 more than the Clark & Sheffield. They also have nice mark-downs on handles of Larceny ($36), Maker's Mark ($43), Knob Creek ($52), Bulleit ($43), and Woodford Reserve ($60). The markdowns range from 14 to 20 percent.

The price on Maker's, at 17 percent off the regular number, reminds me of a time, maybe ten years ago, when Maker's briefly stopped producing the 1.75 liter size because demand was so far ahead of supply. They figured they could serve more customers by keeping the smaller sizes supplied. How times have changed.

This is what we can expect going forward, lots more deals. Nobody wants to lower prices permanently, but the right kind of promotional pricing will help producers handle the present oversupply, that and distilling a little less. These are adjustments. Bourbon is not crashing. This is normal. The last decade was not. 

We can do our part by taking advantage of good deals when they present themselves.

The products mentioned all come from major, legacy producers. What about the many new contract producers and their customers? What about crafts?

Recently, a 7-year-old bottled-in-bond wheated bourbon priced at $24.99 for a 750 ml caught my eye. It was an unfamiliar brand, but those are impressive credentials. I did a little checking. I learned it was a one-off private label created by an independent bottler for a national retail chain. The bottler got a great deal on a barrel lot from a contract distiller and packaged up a great deal for the retailer and its customers. Although the distiller maybe took a haircut, this sort of thing is good for everyone, especially we drinkers.

But you have to keep your eyes peeled.

On the other hand, a major craft producer just announced a limited time price cut on their flagship whiskey. They needn't have bothered. Nobody crosses the street for a 10 percent discount, not in this environment. Any professional marketer knows that. The crafts are new at this. They'll learn, though some may not learn fast enough to stay in business. 

For more on how to win in this brave new whiskey world, CLICK HERE.

My Popes

 

The seven popes so far in my lifetime.

My first pope was Pius XII. He died a few months after I took my First Communion. Our catechisms were old and the picture on the title page was of Pius X (1903-1914), but we also saw pictures of Pius XII and they looked about the same. As six-year-olds, we weren’t taught much about his history. 

What I remember most about my second pope, John XXIII, is not his elevation so much as the events surrounding the Second Vatican Council (1962–1965), which John called but he died before its completion. It was presided over by my third pope, Paul VI.

Everyone in my world was excited about the modernization coming out of Vatican II and about our new Catholic president, also named John. 

Paul seemed bland compared to John, but he faithfully carried out the changes instituted by the Council. I was an altar boy. (I believe “server” is the gender-neutral term.) The prayers we had to learn were all in Latin. We faced the altar during mass, not the congregation. I remember well the transition to the mass in English, facing the congregation, and other changes. I was in high school by then, still serving occasionally, but more frequently doing readings. Instead of suits and ties we wore turtleneck sweaters and love beads.

I also sang in the choir, in the loft at the back of the church, with the pipe organ. I was kicked out, ostensibly because I got caught shooting spitballs, but mostly because I’m a terrible singer. Then we started to have guitar masses, initially playing in the loft with the choir, but eventually in front. I’m not very good at that either but was, apparently, good enough. I was, however, very good at the readings, so I was asked to do that more and more.

In the parish school we had the sisters of St. Francis from Joliet, and diocesan priests from the Diocese of Toledo. The parish had a Monsignor and three priests throughout my time there. They all taught at the school. We also had lay teachers, but all religion classes were taught by a priest or nun. 

I would characterize our education as humanistic. 

The school and parish were completely integrated. My parents were both from big cities, so they told us big city Catholic schools weren’t like that. Almost everything I did was connected to the church and school, such as my Boy Scout troop. School dances were held either in the school’s gymnasium or the church basement.

What I remember most about Paul’s papacy was Humanae Vitae (On Human Life), his encyclical on contraception and reproductive ethics. I was, after all, a teenager at the time. My parents practiced the "rhythm method," the only form of birth control sanctioned by the Catholic Church. They wanted to stop at two kids but had six. After my sisters were born, I learned that Catholic birth control also involved finding a sympathetic Catholic gynecologist to prescribe a hysterectomy when a couple decided their family was complete. 

Paul had a long papacy, 15 years. By the time of his death, I had drifted away from the church. I was living in Kentucky then. I don’t recall ever entering a church while I lived there. 

Paul’s long tenure was followed by one of the shortest, John Paul I, who barely made it a month. His successor, John Paul II, my fifth pope, served for a phenomenal 26 years. I had mostly left the church by then but was never hostile to it and followed developments as they occurred. If I saw the inside of a church, it was back in my hometown for a wedding or funeral. After I moved to Chicago, I checked out the cathedral. It was close to my office. It reminded me of my church back home.

Benedict XVI was my sixth pope and Pope Frank was my seventh. New guy will be number eight. Let’s hope for another good one.

What Happens When America's Major Distillers Jump on a Trend?

 

American malts from the biggest producers.

America has always been able to make malt whiskey, we just didn't. But with the bourbon boom maturing, American distillers have branched out. 

One branch, rye whiskey, nearly dead when the bourbon boom began, has grown even faster than bourbon in the 21st century. Most bourbon brands now have a rye counterpart. Heaven Hill introduced the world to straight wheat whiskey (not to be confused with wheated bourbon) more than 20 years ago. Now Suntory has a wheat whiskey, produced at Maker's Mark under the new Star Hill Farm brand.

The latest branch is American single malt (ASM). Brown-Forman launched a Jack Daniel's ASM in 2023, at about $100. Suntory created a new brand, Clermont Steep (about $50), for its ASM rather than use Jim Beam, Maker's Mark, or one of its other American whiskey brands. Brown-Forman also has a Woodford Reserve malt (about $40), but it's not an ASM. Diageo's is an ASM, sold under the Bulleit label (about $65), but Diageo didn't make it. To the best of my knowledge, neither Heaven Hill nor Sazerac sells an American malt yet, but I know both have made them experimentally.

American single malt has been discussed for years but only became TTB-official recently. 

The future of American single malts is by no means assured. One of the leaders in the movement to make ASM legit was Oregon's Westward Whiskey, which recently filed for bankruptcy.

The fact that several majors have jumped on the bandwagon doesn't mean ASM will succeed. Back in 2013, there was a similar trend that started with craft distilleries, but which the majors jumped on quickly: white whiskey.

Craft distillers had created the white whiskey category a few years earlier, ostensibly as a way to generate revenue while their whiskey aged. If they were making a bourbon or rye mash, that's what their white whiskey was. Mixologists praised their bold, spicy character as a great cocktail ingredient and their clear appearance appealed to people for whom vodka is the quintessential cocktail base.

At the time, an informal survey of whiskey enthusiasts showed that while most found white whiskey interesting, few drank it regularly. No one reported buying a second bottle.

Although all whiskey must, by law, have minimal contact with wood to be called 'whiskey,' it can be for as little as five minutes, too brief to affect flavor or appearance. Unlike Europe and most of the rest of the world, the U.S. has no minimum age requirement for whiskey. It just says the spirit must be 'stored in oak containers' in order to be called whiskey. It doesn't say for how long.

Over the years there have been efforts to get the TTB to add an age requirement, without success.

The rap on white whiskey was that it was simply white dog, whiskey distillate straight from the still, too hot and harsh to be truly enjoyable, especially neat or on-the-rocks, the way most whiskey enthusiasts drink. This continued to be true despite the sometimes hyperbolic claims of micro-producers for whom it was bread and butter.

Then both Jack Daniel's and Jim Beam jumped in. Although both products were bottled at a mild 40% ABV, they approached the subject differently, from the micros and from each other.

Beam's product was called Jacob's Ghost, after 18th century family patriarch Jacob Beam. It was standard Jim Beam bourbon, aged one year, then heavily filtered to remove the color and harsher flavors. The result was still raw, but much milder than white dog, with significant amounts of corn body and barrel sweetness. 

Beam called its product white whiskey, Daniel's did not, because it was not whiskey.

As the press materials said repeatedly, Jack Daniel's Unaged Tennessee Rye was the first new grain bill used at Jack Daniel's since Prohibition. "While many rye products only contain the required 51 percent rye in their grain bill, Jack Daniel’s Unaged Rye consists of a grain combination of 70 percent rye, 18 percent corn and 12 percent malted barley."

Jack Daniel's Tennessee Rye was not whiskey; it was neutral spirit. Essentially, Jack Daniel's vodka. Or so the label said.

Jack Daniel's Tennessee Rye and Jacob's Ghost had similar tastes, but both were very unlike the typical craft white whiskey of the period, or any vodka.

The terms 'neutral spirit' and 'whiskey' are mutually exclusive. A product can't be both. You can't put neutral spirit into a barrel and someday harvest whiskey, although Daniel's implied that was what they were doing with the phrase, "it's just a taste of what's to come."

The whole saga of JD Tennessee Rye got weirder and weirder until they changed the classification to "Spirits distilled from grain." 

But that was its own little drama. Today, Jack Daniel's sells its mature rye whiskey and has created another new mash bill for its ASM. It sells no white whiskey. Neither does Suntory. Jacob's Ghost once again sleeps with the angels. About the only white whiskey you'll find today is corn whiskey, which always was the exception to the aging requirement.

Most of You Reading this Should Be Reading Something Else

 

The New Reader is on its way to the Post Office.

The Bourbon Country Reader is a one-of-a-kind newsletter from the same source as this blog. But it is not the same content. The Reader is news, history, and analysis of American whiskey you won't find anywhere else. It is the oldest publication devoted entirely to American whiskey.

If you enjoy the writing you find here at The Chuck Cowdery Blog, there is a good chance you will enjoy The Bourbon Country Reader too when it arrives in your mailbox about six times a year. It is modestly priced and advertising free, unlike virtually everything else in your life. Subscribe now to rediscover the pleasure of old-fashioned words on paper, savored perhaps with a well-aged bourbon or rye.

The Reader itself is a bit of bourbon history. It debuted in 1994 with something like 17 subscribers. It has grown a little bit since then. The Reader has literally tracked the Bourbon Boom from beginning to now, when it seems to be entering a new phase. This new issue is dated as March 2025, even if it did get mailed a week into April. (It says right on the front page, "Always Independent & Idiosyncratic.") This new one is issue #1 of Volume 23.

If you find yourself coming here, to the blog, for straight talk about the American whiskey industry, you probably should be reading The Bourbon Country Reader too.

Give it a try. A six-issue, approximately one-year subscription is just: 

$25 for mailing addresses in the USA. 

$32 for everybody else. (That is, addresses on earth but not in the USA. Interplanetary service is not yet available.)

The links above take you directly to PayPal, where you can subscribe securely using PayPal, Venmo, or any major credit card.

If you are unfamiliar with The Bourbon Country Reader, click here for a sample issue. 

In the current issue:

We think of small, local distilleries proliferating in the 21st century as something new but they echo, in many ways, the pre-Prohibition history of Tell City, Indiana and towns like it, at a time when drinking locally-made whiskey was normal.

In 1856, a group of German-speaking Swiss immigrants met in Cincinnati to organize the Swiss Colonization Society. They acquired 4,000 acres on the Ohio River between Louisville and Owensboro in Perry County, Indiana. They named their new town "Tell City" after the mythological Swiss hero, William Tell.

Distilleries came and went in Tell City. The biggest and most important one was there for 100 years, in one form or another, on both sides of Prohibition, despite the arrest and conviction of its owner for Prohibition-related crimes.

To get the whole story, subscribe!

Why Do Whiskey Makers Have Only Two Seasons?

 

Spring is one of whiskey's two seasons, fall is the other one.

One little-known aspect of the bottled-in-bond rules is that the whiskey must be made by one distiller at a single distillery in one season. One distiller and single distillery are pretty clear and unambiguous, but what does "one season" mean? Does it refer to astronomical seasons or meteorological seasons?

"Astronomical" is the most common method, where the seasons change on or about the 21st day of March, June, September, and December using the dates of equinoxes and solstices. According to the meteorological definition, seasons begin on the first day of those four months.

Whiskey makers use neither system. They divide the year into just two seasons. Spring runs from January first through June 30th. Fall begins July first and ends December 31st.

This system became part of American law when the Bottled in Bond Act was passed in 1897, but it wasn't arbitrary. Historically, distilleries got going after the grain harvest, typically in late summer or early fall, and kept going until the grain ran out or it got too cold. If there was grain available, they resumed distilling when the weather warmed up and, again, kept going until the grain ran out or it got too hot. 

Even after American agriculture advanced to the point where grain was available year-round, most distilleries shut down during the coldest part of the winter and, especially, the hottest part of the summer. Even today, it can be pretty miserable in a Kentucky or Tennessee distillery in August. Shutdowns are also necessary so workers can have vacations and needed maintenance can be performed.

This has become an issue with the rise of bourbon tourism, since so many people vacation in August. The distilleries still provide tours then but if you want to visit when the distillery is actually distilling something, don't go in August. Another issue is the current whiskey surplus. Distilleries typically adjust their production by lengthening or shortening their shutdowns. Again, if you're planning to visit, check the distilleries for their production schedules. Expect longer-than-usual shutdowns for the next few years.

Producers rarely will skip an entire season. Even if they're reducing production, they like to have some whiskey from every season in the warehouses. Historically, distilleries evaluate their needs twice each year but as the business has gotten bigger and more volatile those evaluations have gotten more frequent.

Back in the days of tax stamps the season and year of distillation and the season and year of bottling were imprinted on the stamp, but that requirement was eliminated in the 1980s. Bottled-in-bond spirits must adhere to the rules regarding seasons, but they don't have to disclose them on the label. Producers may disclose that information voluntarily, as Suntory has done with the Old Grand-Dad expression shown above. Putting that information on the label also tells you this is a one-off and not a permanent addition to the portfolio.

The one disclosure that remains is to identify the distillery by its Distilled Spirits Producer (DSP) license number. If it matters to you that the whiskeys you buy be 'singles,' i.e., the product of one distillery, and you'd like to know the identity of that distillery, stick to bottled-in-bond releases.

How to Win in the Brave New Whiskey World

 

As seen on the TTB website.

When approved labels appear on the website of the Treasury Department's Alcohol Tax and Trade Bureau (TTB), that doesn't necessarily mean those products will be released. This one, however, with the bottling date right on the label, seems like a pretty good bet.*

If it seems like only a few years ago that everybody was dropping age statements, it was. Although Wild Turkey 101 lost its 8-year age statement in the 1990s, and Evan Williams lost is 7-year statement in 2005, Knob Creek's decision in 2016 to drop its 9-year statement was one that really hurt, since its age was always a key part of its brand positioning. Reaction was such that, less than three years later, they restored it.

But an age statement like this, appearing as a new expression of an existing and very mainstream product, seems to auger something else. I mention Wild Turkey because they have 'restored' the 8-year age statement on Wild Turkey 101 for special editions, such as the current one celebrating Jimmy Russell's 70th anniversary, at special edition prices. This, I believe, is not that.

We don't know yet what the pricing will be on 7-year Grand-Dad, but if Suntory plans a high price, they are badly misreading the room. I suspect the suggested retail will be a modest upcharge over the standard BIB and will come out of the box heavily discounted. I predict this, in part, because they chose to do this with Old Grand-Dad and not Basil Hayden, which uses the same liquid but has more premium positioning.

This, I believe, is the beginning of a trend, the purpose of which is to blow out excess inventory.

I've been thinking about how regular, everyday whiskey drinkers here in the USA can take advantage of the current situation. Watching for this sort of thing is one of the ways.

First, where we are. I said "in the USA" because most of the recent noise has been about tariffs, if and when they go into effect. The more immediate and predictable situation has nothing to do with tariffs. It is the decline in sales that seems to mark the end of the bourbon boom.

Let's not overstate it. American whiskey sales declined in 2023 for the first time in more than 20 years, and 2024 was even worse. The 'boom' was a period of growth that was not sustainable. The recent talk from industry leaders touting illusory export opportunities is a good indicator that growth has slowed, and the industry has overproduced. Other factors affecting whiskey sales include ongoing post-COVID supply chain distortions, the effects of cannabis legalization and of weight loss drugs that seem to also suppress the appetite for alcohol, and what appears to be a younger generation with less interest in alcohol than previous cohorts. 

So, is there a whiskey glut? 'Glut' is an ugly word. 'Surplus' sounds better. Because of the aging cycle, producers know one thing for certain. They never get production planning exactly right. They always make either too little or too much. We just went through a long period of too little and are entering a period of too much.

But that doesn't mean the sky is falling. Don't bet against alcohol. It has survived worse, like being entirely illegal for 13 years. More specifically, American whiskey's gains over the last two decades are not disappearing. Growth may be slowing or even flattening, but double-digit sales declines like the industry saw in the 1970s and 80s are not on the horizon.

Probably.

On the positive side, the United States has gone from having about 50 active distilleries in 2005 to more than 3,000 today. Most of those 3,000 are small, but several hundred are not.

Ten years ago, eight companies distilled virtually all of America’s whiskey at thirteen distilleries. Three years later, there were ten companies operating fifteen distilleries. The additions were at the low end of the scale. Today, 16 companies operating 26 distilleries control about 94 percent of America’s whiskey production capacity. 

Again, the newest companies have come in at the low end. Meanwhile, the Big Four (BF, Suntory, HH, & Saz) have only gotten bigger and still have about 65 percent of industry capacity. They can deal with this downturn. I worry about the folks who are just getting started, whose plans did not anticipate tapping the brakes this soon.

But about tariffs, the European Union is and has been the largest American whiskey export market. When tariffs were on between 2018 and 2021, exports plunged 20 percent, from $552 million to $440 million. The EU suspended its tariffs in 2021, enabling exports to surge back even higher — to $699 million last year. 

Tomorrow? Who knows? Just as disruptive as tariffs themselves is uncertainty about tariffs.  

If exports decline that will mean more whiskey for us in the U.S., but that means we won't have help reducing the surplus. The industry needs to correct by reducing production and blowing out some inventory. I'm confident if we drinkers do our jobs and drink like I know we can, the surplus will be absorbed in no time. 

If your drinks portfolio includes other types of spirits, your scotch, tequila, and brandy budgets will probably go further buying American whiskey instead.

Yes, data shows that America's pantries are already overloaded with spirits, but I know people who have built room additions so they could buy more whiskey.

Don't think this means unicorns like Van Winkle will suddenly be plentiful and cheap. If that's your jam, though, be on the lookout for liquidations from folks like Penelope and Barrell. Just don't buy them intending to flip them for a profit on the secondary. While that probably won't go away, I expect it won't be as robust as it has been in the past. If you see something you want to drink, however, the price might be right. 

We probably won't see bargains on anything genuinely collectible or flippable, but expect good deals on drinking whiskey. Some of it will be on brands you know, like Old Grand-Dad, but some will be on brands you've never heard of because they were created for this purpose. Read the labels, especially age and proof statements. As usual, avoid products whose labels are obtuse or misleading. They are a poor bargain at any price.

All we know about this Old Grand-Dad expression comes from the TTB. Suntory hasn't said anything. But we'll keep our eyes open.

* According to custom, and TTB rules, 'spring' runs from January 1 to June 30.

Predicting Bourbon's Future, 13 Years Ago

 

The digital version.

On Christmas morning of 2011, the front page of Section BU of the New York Times featured a 2,500-word article about a phenomenon it called "the bourbon boom."  

"...today’s bourbon boom represents a triumph of salesmanship," wrote reporter Mickey Meece. "At a time when many American industries are struggling, distillers here are thriving, hiring and expanding. They are cashing in on an American renaissance in whiskey-based cocktails, as well as a growing thirst for bourbon around the world."

The lengthy article quotes Larry Kass of Heaven Hill, Mike Keyes of Brown-Forman, Fred Noe of Jim Beam, and many others, but it gives me the last word.

"...many distillers in Kentucky have been expanding. In five to 10 years, will their products be in such high demand? The industry is banking on big growth in India and China, said Charles K. Cowdery, author of Bourbon, Straight: The Uncut and Unfiltered Story of American Whiskey. 'If those markets develop as has been anticipated, no one will have made enough,' he said. 'If they don’t, everyone will have made too much.'”

I have remembered that quote often over the years, each time some industry analyst or executive waxes earnestly about the potential for export sales. Inevitably, their optimistic predictions feature India, China, or both.

"There’s still a big world out there for us to grow the industry in,” said Greg Hughes, president of Suntory Global Spirits, maker of Jim Beam and Maker’s Mark, at Monday's James B. Beam Institute industry conference at the University of Kentucky, as reported in today's Lexington Herald-Leader. 

“India’s a huge opportunity market for the spirits industry," said Hughes. "... there’s a bunch of beer markets out there ... that we can source volume from. ... If we can get 5 (percent) of the Scotch market in India, we’ll have all the distilleries in Kentucky full.”

On the Leadership Panel with Hughes was Kate Latts, co-president of Heaven Hill Brands. “We’ve all increased production to catch up with demand and now we’ve caught up," said Latts. "So now we’re ready. We’re ready. And when these tariffs go away we’re ready to experience ... the unknown demand that exists across the entire world. If we could just get, as Greg said, a little bit of that Scotch and beer consumption, we’re going to be in a place where we don’t have enough. So first we need to get rid of the tariffs and then we can make that all happen.”

The point of this walk down memory lane? Massive international sales to India, China, and other undeveloped bourbon markets have been predicted and touted for at least the last 13 years. While exports have increased, the top five export markets for American whiskey today are the European Union, Australia, Japan, the United Kingdom, and Canada, in that order. That's about how it looked in 2011 too. Then as now, India is essentially closed to distilled spirits imports. Why? Because of tariffs, up to 200 percent, but those tariffs have nothing to do with the current government in Washington. They have been in place forever. China is even more restricted. 

Those markets can't develop if they don't open up and there is nothing to suggest that will happen anytime soon. As the Herald-Leader article's always astute reporter, Janet Patton, put it, industry leaders, "may not agree on everything but they agree on this: There is no whiskey glut. Or at least there wouldn’t be if they could sell more bourbon overseas."

So, in other words, there's a whiskey glut.