More About MGP

In bourbon country, it's rare for a distillery to launch a new recipe, so to launch six at once--as MGP will do this month--is unprecedented. How do you do it? Here is an explanation from Don Coffey, Ph.D., MGP’s Vice President of Research, Development and Innovation.

"MGP’s development of the new mash bills was initiated in response to customer interest combined with our desire to provide a broader selection of specially-made premium whiskeys and bourbons," said Dr. Coffey. The announcement earlier this week, that MGP will begin to make six new mash bills at its Lawrenceburg, Indiana, distillery, is the first new products announcement since MGP bought the distillery in 2011. "This expanded portfolio of product offerings enables our customers to further distinguish their brands while satisfying a growing diversity of consumer preferences and tastes," said Coffey.

The development phase required planning and teamwork among various personnel and departments, including research, development and innovation, sales and marketing, operations, sourcing and logistics, and the master distiller in Lawrenceburg, Greg Metze.

"In preparation for actual production runs, and to make certain the mash bills possessed the distinct qualities being sought, each was piloted and thoroughly checked in a laboratory setting," Dr. Coffey explained. "Scale-ups are planned to occur throughout April. However, production of the six mash bill additions will not be launched simultaneously, but are scheduled at different intervals during the month."

They have already started, with the new rye whiskey made from 51% rye and 49% barley malt.

"At this time, precise dates and the order of preference have not been assigned to production scale-ups for the remaining five mash bill formulations," said Coffey. "To make this determination requires that a number of variables, including maintaining optimum production scheduling efficiencies for all of our products, undergo thorough consideration so as not to disrupt operations as a whole, as well as our ability to effectively and consistently supply ongoing customer needs."

MGP, which sells no brands of its own, makes distilled spirits for a wide range of customers, from Diageo (the world's largest drinks company) to many of today's new micro-producers. In addition to whiskey, MGP is the largest gin producer in the U.S., and also makes vodka.

And here's a note about MGP of Indiana's two current bourbons, which they universally refer to as "25% bourbon" and "40% bourbon." Turns out, that's not the rye percentage, it's the total percentage of small grains, i.e., the percentage of the mash bill that's not corn. The mashbill for the 25% bourbon is 75/21/4 and the mashbill for the 40% bourbon is 60/36/4. I regret any confusion this may have caused and I hope they do too. (It's a weird way to state it.)

Diageo Loses Cuervo to Proximo

This has little to do with whiskey directly, but it's a big news day for people who follow the distilled spirits business, and anything that shakes up the industry this much is bound to affect whiskey at some point.

Today The Big Galoot (my pet name for Diageo) got a little smaller, as the other shoe dropped in the ongoing saga of Diageo and Jose Cuervo Tequila in the U.S. market.

Here's the synopsis of our story thus far. Jose Cuervo is far and away the best selling tequila in the U.S., fluctuating in recent years between 3.5 and 3.9 million cases, and trending down. Diageo doesn't own Cuervo, it's merely the distributor, and that contract ends June 30. Diageo tried to buy Cuervo from its owners, the Beckmann family, but that fell apart in December.

So the question has been, what's next for Cuervo? A new distribution deal with Diageo? Someone else? A sale to someone else? Or self-distribution?

Five years ago, the Beckmanns established a distribution company in the U.S. called Proximo Spirits, which sells 1800 Tequila, 3 Olives Vodka, and other small brands. Taking on Cuervo will more than double Proximo's size, so that was by no means a sure thing. It is, however, the choice announced today.

Proximo's only whiskey property is Stranahan's Colorado Whiskey, which is tiny compared to Cuervo but probably the biggest micro-distillery whiskey in the country.

Diageo, meanwhile, will fight back by promoting its other tequilas, principally Don Julio. The other challenge for Cuervo is the current glut of inexpensive, 100%-agave tequilas on the market. The other story this may impact is the ongoing speculation that Diageo will make a play for Beam Inc. Jim Beam itself is the prize, but does the fact that Beam owns Sauza, the #2 tequila, make such a move more or less likely? Only time will tell.

October Interview With John Lunn Reconsidered

Back in October, when Diageo announced the introduction of George Dickel Rye, I had occasion to talk briefly with John Lunn. He didn't have much to say that wasn't already in the press materials, but we had never met so I took the opportunity to chat him up when it was offered by the PR folks. We had a brief but pleasant conversation.

Earlier last year, I had learned that, in addition to being Master Distiller at the George Dickel Distillery in Tennessee, Lunn had been given responsibility for operations at the company's Stitzel-Weller Distillery in Kentucky. With the revelation this past Sunday that Diageo will resume distilling at Stitzel-Weller, revisiting that interview seemed like a good idea.

There were a few interesting tidbits. I learned that the property in Tennessee is 600 acres, so there's plenty of room for expansion, though nothing is currently planned. I probed for any inkling of future plans, but nothing leaked. "We're always looking at innovation, what we can do and what the people want," was all he would say.

We talked a little bit about Ralph Dupps, who oversaw the building of George Dickel in the late 1950s. Lunn got to meet Dupps before his death in 2008 at the age of 90. "His only advice was, 'Don’t change a damn thing,'" Lunn told me. That's when I learned that everything at Dickel is done the old fashioned way. There are no computers. "It's all sight and sound, touch and feel. Some of the employees here have 30 or more years of experience."

Although nothing was said about distilling resuming at Stitzel-Weller, we did discuss his responsibilities there. Operations there include maturation--which involves entering barrels, periodically checking them, and removing them when the whiskey is ready to sell--as well as blending. He declined to name which brands are matured or blended there, or where the whiskey aging there was distilled.

Visitors granted admission to The Bulleit Experience at Stitzel-Weller are not allowed to get close enough to the warehouses to look in the windows and see what the barrel heads say.

There is no bottling facility at either George Dickel or Stitzel-Weller. The whiskey goes from there to Plainfield, Illinois for bottling. Several requests to tour that facility have been denied.

Diageo has not publically confirmed anything about its plans for Stitzel-Weller.

So we don't know what Diageo plans to do at Sttzel-Weller, or if John Lunn will have anything to do with it, but it's easy to paint a pleasing picture of Mr. Lunn, after doing things 'the old fashioned way' at Dickel, doing the same thing with the mothballed equipment at Stitzel-Weller. Wouldn't that be something?

Extremely Rare Joseph Finch Bottle Spotted in Texas

This arrived in the inbox Sunday, from a reader in Texas. "I recently found a bottle of Joe Finch in Beaumont, Texas."

He was looking for more information about it, specifically where it was made. Unfortunately, that question is unanswerable, for reasons that will become clear shortly.

Never heard of Joseph Finch Bourbon? Not surprising. It's so rare, no one is even looking for it.

But it's a good lesson in how anything that has ever been out there in the marketplace is liable to turn up somewhere. That's why there are enthusiasts, known as 'dusty hunters,' who comb the bottom shelves of old stores in forgotten neighborhoods, looking for rare, old bottles of bourbon.

The reason this makes sense, where you wouldn't go looking for rare, old bottles of milk, is because whiskey doesn't change in the bottle, so if a store has poor inventory control systems, a bottle can remain on the shelf for decades. Hence 'dusty.'

Last year at about this time, as The Best Bourbon You'll Never Taste was being written, a bottle of A. H. Hirsch Reserve was spotted at a store in Kentucky, and scored for its original price of about $45.

Here's the Joseph Finch story.

Joseph Finch and Henry Clay were two limited edition bourbons released in 1997 by United Distillers, a predecessor company to today's Diageo. They were to be the initial offerings in a series called the Rare Bourbons Collection. Fewer than 2,400 bottles of each brand were produced. The packaging was fancy and the price was high.

Then the company changed direction, sold all but two of its American whiskey brands, along with most of their old stocks, and no more Rare Bourbons were released. Both Finch and Clay are almost impossible to obtain today.

Almost, but apparently not quite.

The idea of the Rare Bourbons Collection came about because United Distillers was formed through the acquisition of literally dozens of different companies over more than 70 years. Inevitably, with each new acquisition the company obtained stocks of aging whiskey. Usually, the acquired whiskey was merged with the company’s existing stocks and used in whatever brands the company was still selling. Often, it was used to create blends or other products that did not require strict identification of the whiskey’s origin.

In the late 1990s, as the bourbon category was beginning to show signs of life after three decades in the doldrums, United executives began to wonder if there wasn’t a better way to market the 'odds and ends' of their vast holdings from distilleries no longer in operation.

The result was the Rare Bourbons Collection. The idea was that a given stock of exceptional, highly aged whiskey would be named, bottled, and sold until it was exhausted, then that line would be discontinued. When all of the various rare bourbon stocks were gone, the whole project would end.

That was the idea, anyway. But it never got that far.

Not that it ultimately mattered, but one big flaw in their thinking was that while they decided to use names significant to the history of American whiskey, they chose not to identify where the various whiskeys were actually made. So it was that the product called Joseph Finch was not, in fact, made at the Joseph Finch Distillery in Pennsylvania, which produced the popular Golden Wedding brand before Prohibition. It was distilled and aged somewhere in Kentucky, but that's all we know.

Nor did the Henry Clay Bourbon have any connection to that Kentucky statesman.

The Henry Clay Bourbon was 16 years old and 90.6° proof (45.3% ABV). The Joseph Finch Bourbon was 15 years old and 86.8° proof (43.4% ABV). Both were priced at $80 a bottle, which is stiff even now and was unheard of in 1997.

Joseph S. Finch was a real guy. He established his Pennsylvania distillery in 1856. His ancestors had been distillers back into colonial times. In 1924, Lewis Rosenstiel acquired the Finch distillery and merged it with his Schenley Products Company, named after another Pennsylvania distillery. Many other acquisitions followed, leading to the company we now know as Diageo.

What killed the Rare Bourbons Collection? United merged with Grand Metropolitan to form Diageo but the new company was overloaded with debt, so it began to sell assets, including all of its American whiskeys except George Dickel Tennessee Whiskey and I. W. Harper bourbon, which it only sells outside the United States. The Rare Bourbons Collection had been part of a whiskey-centric strategy that was abandoned when the company found itself owning Smirnoff Vodka.

While we don't know where Finch and Clay were distilled and aged, we do know where they were bottled: at Diageo's Stitzel-Weller Distillery, which was no longer distilling by then but was active with maturation, bottling, and the offices of some sales and marketing staff.

After More Than 20 Years, Stitzel-Weller to Resume Production

Earlier today, John Hansell reported on the Whisky Advocate Blog that Diageo sources have told him Stitzel-Weller will resume production soon. No further details are available. Hansell received the news in confidence several months ago, and decided to confirm it today after the news began to leak over the weekend. According to one report, on Friday night a Diageo rep spoke about it freely at Bourbon's Bistro in Louisville.

Stitzel-Weller is the Louisville distillery established by the Van Winkle family after the repeal of Prohibition in 1933. It was known for producing wheated bourbon, which it sold as Old Fitzgerald, W. L. Weller and several other brands. The Van Winkle family sold the distillery, its whiskey stocks and brands in 1972. After that, ownership changed several times until it landed with a predecessor company to Diageo, which closed it in 1992. Since then, the warehouses have been used but not the distillery. There have been multiple reports that the need for asbestos abatement makes it cost prohibitive to return the existing distillery to production. How that will be resolved remains unknown.

In 1999, Diageo sold Old Fitzgerald and the other Stitzel-Weller brands.

When the Van Winkle family sold Stitzel-Weller, they retained rights to Van Winkle as a brand name and went into business as a non-distiller producer, using whiskey bought from their family's former plant. This is the basis of the now famous Pappy Van Winkle line, although today only the 23-year-old is entirely Stitzel-Weller bourbon. In other forms too, whiskey produced at Stitzel-Weller has long been highly prized but, after more than 20 years, it is very scarce.

Diageo's only active whiskey distillery in the United States is the George Dickel Distillery in Tullahoma, Tennessee. In 2012, Dickel Master Distiller John Lunn was put in charge of operations at Stitzel-Weller, where whiskey for Diageo brands is matured and blended.

We await an official announcement from Diageo as well as meaningful details. Whatever the plan, it will be several years before new Stitzel-Weller whiskey will be ready to sell.

In recent years, Diageo has prepared Stitzel-Weller to serve as a homeplace for Diageo's Bulleit brand, which is made elsewhere at non-Diageo facilities. Although The Bulleit Bourbon Experience has been ready for nearly two years, it hasn't been opened to the public. Presumably that too is imminent, but again there is no official word.

Diageo Launches Bulleit 10, Surprising No One

In recent years it has become almost impossible for alcoholic beverage producers to keep their new products a secret until launch. So it is that the new 10-year-old iteration of Bulleit Bourbon was announced today with plenty of fanfare but not much excitement, since everyone has known about it for months.

The U.S. Treasury Department's Alcohol Tax and Trade Bureau (TTB) is part of the problem. Labels for alcoholic beverages have to be approved in advance by the TTB. Each approved application--formally known as a Certificate of Label Approval (COLA)--is public information and easily found on the TTB web site (ttb.gov). COLA trolling is a popular hobby among some enthusiasts.

In addition, producers will often test market their new products, or announce them well in advance to trade audiences such as distributor sales forces. Today, with social media and a camera in every pocket, a new product that makes a brief appearance in Walla Walla, Washington, will have its image broadcast around the world in minutes.

For reasons that are increasingly hard to fathom, company PR departments and their agencies steadfastly refuse to confirm the new offerings until the official release date. The ancient practice of giving favored journalists the first taste has become an empty gesture.

So it is that today marks the official launch of Bulleit 10, which made its first appearance on StraightBourbon.com on November 10th. It should begin to appear on store shelves, at about $45, toward the end of this month. It will be ever-so-slightly higher in proof than standard Bulleit, 91.2° proof (45.6% ABV) instead of 90° proof (45% ABV).

Here's a fun game you can play. The press release mistakenly states the Bulleit 10 ABV as 45.5%. Let's see how many 'journalists' fail to catch the mistake. (ABV is always proof divided by two.)

Since the standard Bulleit Bourbon expression is NAS (no age statement), it's impossible to know how much older the 10-year-old version even is, but it's bound to be good. Bulleit Bourbon is made for Diageo by Four Roses and everything they make is good.

Of Whiskey And Innovation (Part 2)

A small number of companies own most of the world’s major distilled spirits products, so it’s not surprising that we often see them doing similar things across their portfolios. ‘Innovation’ is the hot buzzword right now, even in the whiskey space which is usually innovation-averse.

You’ve read here about Diageo’s recent innovations with its Crown Royal and George Dickel brands. Now it’s the flagship’s turn.

Introducing Johnnie Walker The Spice Road, the first of a portfolio of whiskeys that take their inspiration from the traveling heritage of John Walker & Sons. It’s available only in duty free stores, but it shows what ‘innovation’ means for the world’s leading whiskey brand. (A title that goes to either Johnnie Walker or Jack Daniel’s, depending on how you count and who you ask.)

This is not a flavored whiskey, as one might be entitled to suppose. It’s a special, limited edition blend. Scheduled for future release are The Gold Route and The Royal Route. Here is how Master Blender Jim Beveridge describes this premier release: "To create the intense spicy flavor profile of Johnnie Walker The Spice Road, we used well-matured single malts and grains, presenting all their fresh vibrant distillery characters, aged in carefully selected, high quality American oak casks; and of course there is a trace of West Coast smoke in the background - revealing the classic Johnnie Walker signature.”

Duty-free means limited availability, and many readers of this blog have little interest in blended scotch. This is interesting nevertheless because it shows another way a whiskey-maker can innovate without necessarily making a new whiskey from scratch, thereby avoiding the many years of lead time that entails. It also ties-in neatly with the distribution channel, a very sophisticated maneuver.

It’s a good story too. Here’s the gist of it. From 1820, the Walker family and their agents traveled the world, navigating their way down the famous trade routes: the Spice Road of Europe and Asia; the Royal Route from Europe to Persia; and the Gold Route of the Americas and the Caribbean.

Their efforts ensured that, by the 1920s, Johnnie Walker had arrived in 120 countries and was being enjoyed on the great railways, luxury ocean liners and early transatlantic flights. Meanwhile, the striking image of the Johnnie Walker Striding Man was becoming an icon all over the world.

Back in London, close to the shipping houses and docks from which the Johnnie Walker agents traveled the world, Alexander Walker established the Travelers’ Room (pictured, above) where his agents would convene to rest, talk strategy, and exchange stories and samples from their travels.

This all sounds true and, assuming it is, it means Diageo shows more respect for Walker’s history that it does for Dickel and Bulleit, its main U.S.-whiskey brands, where it prefers fiction.

Of Whiskey And Innovation

For a craft that usually prefers to talk about tradition and heritage, and things that never change, whiskey makers have been crowing a lot lately about innovation. For the majors, new product innovation seems to be proceeding on two paths. On one are products enthusiasts love: limited editions, experiments, and ultra-premium expressions. On the other are products enthusiasts despise: flavored whiskeys.

The post here two weeks ago about Crown Royal XR LaSalle, part of Crown's Extra Rare (XR) series, represents Crown's appeal to the enthusiast community. Now the other shoe has dropped, with the introduction of Crown's first flavored whiskey, Crown Royal Maple Finished.

Maple is the natural choice for a Canadian and Crown Royal (a Diageo brand) is commended for not rolling out one more with honey. (They already have Dark Honey under the Seagram's Seven brand.) The packaging is similar to standard Crown, except with a bronze-colored label and a brown velvet bag instead of the usual blue.

They describe it this way: "Crown Royal Maple Finished begins with the legendary taste of Crown Royal whisky. The liquid then incorporates a touch of natural maple flavor achieved through a proprietary maple toasted oak finishing process for added smoothness."

Through questioning, the following translation was elicited. "Crown Royal Maple Finished Whisky is made by adding a touch of natural maple flavor to the whisky and then we introduce it to toasted oak staves and toasted oak chips. The introduction of these toasted oak staves and chips delivers characteristics of the oak to the liquid, one of which is reminiscent of maple. This finishing process also delivers a smoothness to the whisky, worthy of Crown Royal."

The result? If you believe maple syrup is the best part of pancakes, and wish you could drink it straight from the bottle, now you can, plus get a buzz. To describe it as alcoholic pancake syrup may sound pejorative, but not if you really love that flavor. The maple taste is very good, full and rich. Most of it comes from the 'natural maple flavor' but the specially toasted oak staves and chips have a noticeable and positive effect. Identifiable as oak but nicely complementing the maple, they provide added depth with something recognizable from the whiskey lexicon.

Which is good because, without it, there's not much evidence of whiskey here. All distilled spirits, even vodka, have a body and mouth feel that's distinctive to distillates. Crown Maple has that, and the aforementioned oak, but otherwise the whiskey part of this drink is just a rumor.

Still and all, if you really like maple, Crown Maple should work for you. Open this for a party and expect an empty bottle by the end of the evening. Suggested retail is $24.99.

But, be warned, it may bring back some childhood memories.

Gift Ideas For Canadian Whiskey Fans.

Diageo is the world’s largest distilled spirits company. I call it The Big Galoot, TBG for short. I criticize Diageo for many things, but not understanding American whiskey and mismanaging their American whiskey portfolio is their greatest sin.

Our disagreement, such as it is, isn’t so much about right and wrong as it is about different points of view. I’m Kentucky/Tennessee-centric. I’m all about straight whiskeys, bourbon and rye, where Diageo is weak. Diageo, however, sees the segment as North American whiskey. Their Big Magilla is Crown Royal Canadian Blended Whisky, a brand they obtained in the Seagram’s carve-up a decade ago.

Crown Royal is the only North American whiskey on Diageo’s ‘strategic brands’ list. Those are the big, global brands on which Diageo hangs its hat. Crown is the #1 Canadian whiskey, sells about 5 million cases a year, and is mainly sold in Canada, the United States, and France. Among North American whiskeys, only Jack Daniel’s and Jim Beam sell more. Crown probably has a bright future in other global markets too, which is what makes it strategic.

Although Diageo didn’t make Crown a major brand, it has done a good job of keeping it there. One fine initiative has been the Extra Rare (XR) series. The second installment, released earlier this year, is Crown Royal XR LaSalle. It was created from a small reserve of whiskeys from the LaSalle Distillery in Montreal.

The LaSalle Distillery was built beginning in 1924, began distilling in 1928, and stopped distilling in 1993. Andrew MacKay, Crown Royal’s Master Blender, who created XR LaSalle, began his career there.

As a bourbon drinker, I generally find Canadians tasty but way too mild. That’s my taste. I know Canadians have a huge following on both sides of the border and I’m not putting this style of whiskey down. It’s just not my preference, although I enjoy it from time to time as a change of pace.

That said, Crown Royal is among the best and XR LaSalle is a step beyond that; rich, creamy, and fruit forward. I like this whiskey, both as a drink and a gift. The suggested retail is $130 for a 750 ml bottle. That may seem like a lot, but it is a limited edition, and the packaging is impeccable. It starts with an ornate, heavyweight cardboard box, continues with the classic velvet bag, and the decanter-style bottle has a glass stopper. It’s a very nice, genuinely impressive presentation.

Obviously, this is a fine gift for the regular Crown Royal drinker, but any Canadian whiskey fan should appreciate it.

Speaking of great gifts for Canadian whiskey drinkers, Davin De Kergommeaux's Canadian Whisky, The Portable Expert, is simply the best book ever published on the subject. It's the definitive guide to Canadian whiskey. Nothing else even comes close. He explains the history, how Canadian whiskey is made today, and how it differs from other whiskeys such as bourbon and scotch. He gives you a guided tour of every distillery and reviews every one of their products. It's awesome. Suggested retail price is $24.99 in Canada, $22 in the USA. 

George Dickel Gives A Different Taste To LDI Rye

There’s an interesting link between the new George Dickel Rye and Templeton Rye. Though not available in most of the country, Templeton Rye has, in a short time, become a major brand in Iowa and Illinois, including the major market of Chicago.

When Templeton debuted in 2005, the company was extremely secretive about where it was made. They wanted people to believe it was made in Templeton, Iowa, since mythology about that small town’s Prohibition-era reputation as a leading illegal whiskey source was the heart and soul of the company’s marketing strategy. That was impossible, since the company got its license as a distilled spirits producer the same year it launched its product, which as a straight rye whiskey had to be at least two years old, and tasted more like five or six.

Obviously, Templeton was whiskey made by another distiller, but who? Most lists of the usual suspects (including mine) didn’t include the old Seagram’s distillery in Lawrenceburg, Indiana, which turned out to be the source. Little was known about that distillery, then owned by Pernod-Ricard, except that it made Seagram’s Gin, Seagram’s Vodka, and Seagram’s Seven Crown Blended Whiskey, but no straight whiskeys sold in the U.S.

Since then, many straight ryes have been introduced using whiskey made by the distillery best known as Lawrenceburg Distillers Indiana (LDI), which last year was sold to MGP Ingredients, Inc. of Atchison, Kansas. Templeton was the first to bring LDI’s unique 95% rye to market and George Dickel Rye may be the last, as least for now, since almost all of LDI’s current rye inventory is less than a year old. (Dickel has its supply locked up.)

The recipe, which calls for 95% rye grain and 5% malt, was developed many years ago, when Seagram’s still reigned. It was created by Larry Ebersold, then master distiller there. At first they made a standard rye whiskey, just 51% rye, the rest corn and malt. They wanted more rye flavor so they experimented with a recipe that was 80% unmalted rye and 20% malted rye. Everyone loved the result except the accountants, because malted rye is expensive, so they changed the proportions to 95% unmalted and just 5% malted rye. Still too expensive, said the accountants, so they replaced the rye malt with standard barley malt, and that’s the recipe LDI makes today.

The whiskey was always intended to be an ingredient in blends, not a straight. The company liked it so well for that purpose they decided to make it at their plant in Gimli, Manitoba, for use in Crown Royal and other Canadian whiskeys. They failed because a crucial strain of bacteria, native to Indiana, couldn’t survive beyond one generation in the harsher Canadian climate.

Since Templeton, the LDI rye has appeared as straight rye whiskey from High West, Redemption, Filibuster, Smooth Ambler, James E. Pepper, and now Diageo's Bulleit and George Dickel.

Although Diageo doesn’t own LDI, they’re its biggest customer. For several years, Diageo has worked with LDI to develop rye whiskey products for Bulleit (released last year) and Dickel (coming soon) using the LDI rye. The Bulleit version is very similar to Templeton but the Dickel Rye is different.

According to Dickel Master Distiller John Lunn, the aged whiskey is transported from Indiana to the Diageo bottling facility in Plainfield, Illinois, near Chicago. There it meets up with charcoal sent from the Dickel distillery near Tullahoma, Tennessee. At Plainfield, it goes through the exact same charcoal mellowing process as George Dickel Tennessee Whisky does at the distillery. The only difference is that the Tennessee Whisky is filtered before aging and the rye is filtered after aging. It is done in the same way using the same charcoal, after chilling the whiskey to 40°F.

Compared to Bulleit Rye, the difference in flavor is dramatic. Critics of filtering claim it makes any whiskey less flavorful, but that’s not the case here. There is plenty of flavor, but it’s different. Bulleit Rye is fruity but the fruits it suggests are red grapes, plums, and dark berries. Dickel Rye has a strong citrus flavor, suggesting variously grapefruit or pineapple. It’s appropriately sweet with a little bitterness, like peanut brittle, licorice or sassafras. There’s some soot and also raspberry and apricot.

If Dickel Rye does well it will be good for LDI, since Lunn says there are no plans to distill rye at the Tullahoma plant. “We’re concentrating on making the best Tennessee Whisky we can,” he says. They’re not planning to expand the distillery or build more warehouses either, but they have 600 acres, so there’s plenty of room to grow. There are no other products or projects, such as limited edition releases, that Lunn wants to talk about, “but we’re always looking at innovation, what we can do and what the people want,” he says.

At 42, Lunn is one of the youngest master distillers for a major producer. He was trained by his predecessor, Dave Backus, and even got to meet Ralph Dupps, who built the current Dickel distillery in 1958. Dupps gave him one piece of advice, “Don’t change a damn thing.”

He hasn’t. Dickel is unique in operating almost exactly as it did 50 years ago, with no computerized control systems.

The business has been buzzing about rye whiskey for almost a decade, but in the last year or so several new ryes have been introduced as line extensions of major bourbon or Tennessee whiskey brands, including Jack Daniel’s, Knob Creek, Bulleit, and now George Dickel. This should prove whether or not the heavily-publicized rye whiskey revival really has legs or not.

NOTE 10/29:  Made a correction today based on information received from Diageo. When Lunn said they 'use the same charcoal," I incorrectly assumed they filtered it at the distillery. Instead they send the charcoal to Plainfield, Illinois, where Dickel is bottled. Sorry about that.

Whiskeys Top Shanken's 'Hot Prospects.'

For the first time ever, the whiskey category has the highest number of brands in Impact’s spirits 'Hot Prospect' rankings. Seven whiskey brands earned Hot Prospect honors for 2011, narrowly edging out vodka, which had six.

The winning whiskies are Woodford Reserve Bourbon from Brown-Forman, Pendleton Canadian whisky from Hood River Distillers, Bulleit Bourbon from Diageo North America, Glenmorangie single malt Scotch from Moët Hennessy USA, The Balvenie single malt Scotch from William Grant & Sons USA, Devil’s Cut Bourbon from Beam Inc. and Seagram’s 7 Dark Honey from Diageo North America.

The Hot Prospects designation is for brands that posted at least 15 percent depletions growth in 2011, while also showing consistent growth in 2009 and 2010. Brand volume must be at least 50,000 cases but not more than 200,000 cases. New products can also qualify as Hot Prospects if they pass the 50,000-case mark in their first year.

Also on the list, as a liqueur, is Evan Williams Honey Reserve from Heaven Hill. It is through only the narrowest of technical distinctions that Evan Williams Honey is considered a liqueur while Seagram's 7 Dark Honey is considered whiskey. Both can be found in the American whiskey section of most liquor stores.

That the list includes more bourbons than single malt scotches is notable. That it includes flavored whiskeys at all raises worries about category confusion, but also shows that these products have developed a strong following in a short time. Seagram's 7 Crown, the #1 American Blended Whiskey, has been a moribund brand in a moribund segment, making the rise of Dark Honey a surprise.

When You're The World's Biggest, What's Small?

In marketing terms, 'niche' is usually a nice way of saying 'little.' One way to grasp just how huge spirits industry leader Diageo really is by looking at what they consider 'niche' brands. This examination became more convenient last September when Diageo created Catalyst, a business unit focused on 28 spirits brands the company classifies as 'niche.' Together they bring in about $250 million a year.

Diago's stated goal is to double that by 2014. The unit experienced a setback when its first president, a 20-year Diageo veteran, abruptly left the company just four months into her new job.

The Catalyst portfolio includes line extensions such as Tanqueray Sterling Vodka, acquisitions such as Stirrings Liqueurs, new products such as Moon Mountain Vodka, and small but venerable brands such as Pimms and Myers’s Rum.

Whiskey enthusiasts will be interested to know that the Catalyst group contains several esteemed single malts: Lagavulin, Glenkinchie, Cragganmore, Dalwhinnie, Caol Ila, Clynelish, Oban, and Talisker. George Dickel Tennessee Whiskey is 'niche,' as are pseudo-whiskeys Jeremiah Weed and Yukon Jack.

The word 'catalyst' has become fashionable in company names without much regard for its dictionary definition, which is something that causes change without being changed. The word 'niche' also seems misused, since it usually means a product or service that appeals to a very narrow and specific audience. One thing true niche brands do not do, almost by definition, is double in size.

If you examine it, Catalyst starts to look like a free-standing luxury brands portfolio, especially if it shed Weed, Jack, and Moon. The single malts are an exceptional collection, and George Dickel is a brand full of potential that Diageo has never quite realized.

No one has said anything about a spin-off, but wouldn't that be nice?

The Bulleit Experience At Stitzel-Weller Distillery.

Several years ago at WhiskyFest Chicago, I was chatting with Chris Musumeci, then brand manager for Diageo's Bulleit Bourbon.

We talked about the growth and popularity of the brand. "At some point," he said, "Bulleit will need some kind of home place."

The distillery where it is made would be the natural home place but, as we both knew, Bulleit's products are contract distilled by non-Diageo distilleries. 

My comment was, "Well, there's always Stitzel-Weller." Stitzel-Weller is the old Van Winkle family distillery. Built in 1933, it operated until 1992. It was the home of Old Fitzgerald, W. L. Weller, Rebel Yell, Cabin Still, and Old Rip Van Winkle wheated bourbons. The company now known as Diageo has owned it since 1987.

Last summer, it seemed as though they had taken my suggestion. "The Bulleit Experience at Stitzel-Weller Distillery" was announced with moderate fanfare. Industry people, including myself, were invited for previews. A few preview events were held. Mine was cancelled.

Another visit was scheduled and cancelled earlier this year. Two weeks ago, I finally got to peak behind the curtain.

The first pleasant surprise. There is a guard on the front gate again. In recent years, only the back gate has been used.

I was met by Tom Bulleit (left, in the photo) and Bobby Burke, who was introduced as the first tour guide. The focus of "The Bulleit Experience at Stitzel-Weller" is the old office building, whose design was based on Thomas Jefferson's home, Monticello. The effect of Southern gentility is enhanced by the large magnolia tree in front.

To the right, there is a small gazebo. To the left is the first row of black-painted, steel clad aging warehouses. On the long side of each warehouse there is a raised concrete walkway covered by a low roof, giving it the look of a covered porch. Upright whiskey barrels and rocking chairs complete the effect.

It is possible, therefore, to walk along the long side of each warehouse, protected from the elements, though still outside, and look into the open first floor windows, yet that's not part of the tour because of "insurance concerns."

Instead, details of the office building's architecture are pointed out. Don't get me wrong, I love that sort of thing. Inside there is a vestibule with some benches. The next door leads to a large room with exhibits that tell the history of the distillery, of the Bulleit brand, and of Kentucky whiskey-making in general. There are a couple of barrels marking production milestones and other artifacts drawn from the distillery's vast archives.

This central room has several doors. One leads to Tom Bulleit's office, which occupies a small portion of what was originally Pappy Van Winkle's vast office. It's a very handsome room.

Another door leads to another now-subdivided part of Pappy's old office, that is decorated like a library. This is where the tastings will take place. This space has a large window that provides a nice look at the grounds. Then there's the gift shop.

That's it.

I had a very nice time with Tom and Bobby. I was just meeting Bobby but I've known Tom for years and always enjoy his company. As I told them, I think people will be disappointed if they can’t see a little more of the distillery, in particular the inside of a warehouse and at least an outside look at the old still house. If going inside isn't possible, then at least include a walk of the grounds pointing these things out.

That's all there is anyway. No distilling or bottling is done there.

I also don't know where people are going to park. They have maybe ten spaces in front of the office building and no place for buses. You wouldn't want to sully the grounds by laying more asphalt. These may be some of the reasons why the place isn't open to the public. Tom and Bobby say they don't know when it will open. It's not up to them.

They did mention that recent road improvements make it easier to get there from Interstate 65, and the improved road takes the visitor past Papa John Stadium and Churchill Downs, where they might be going anyway.

For now, they're just using it to host journalists and trade customers.

They'd love to be on the official Kentucky Bourbon Trail and it would love to have them.

As they also point out, Stitzel-Weller is an active maturation facility. As such, it is overseen by John Lunn, who is best known as Master Distiller at George Dickel. He was recently promoted to Southern Hub Director for Diageo. The Southern Hub is comprised of the Dickel and Stitzel-Weller sites. As Director, Lunn oversees daily operations and is responsible for production, quality and safety.

Kentucky Tavern Gets A Face Lift.

Kentucky Tavern has gotten a face lift. This is the new label.

Kentucky Tavern was the flagship brand of Glenmore Distillery, which had its offices in Louisville, with the distillery itself in Owensboro.

Glenmore also owned the Yellowstone brand, and its distillery in Shively (a Louisville suburb). Yellowstone was the bigger brand, but it was like Jack Daniel's is to Brown-Forman's founding brand, Old Forester. Kentucky Tavern - known as KT - was Glenmore's flagship.

Glenmore was the Thompson family's distillery. The Thompsons, Browns and Van Winkles were Louisville's leading distilling families of the post-Prohibition era. The Van Winkles sold Stitzel-Weller in 1972. 'Buddy' Thompson sold Glenmore to what became Diageo in 1991.

KT got beat up and bounced around after that, at various points becoming "Kentucky Whiskey," and even a blend.

Now owned by Sazerac and made at the Barton 1792 Distillery in Bardstown, it is Kentucky Straight Bourbon Whiskey once again.

The KT brand was somehow linked to an actual Louisville bar of the same name, frequented by Louisville downtown business types because it was conveniently located between downtown and their northeast side homes. The bar's heyday was the 1950s, so one assumes the bar was named after the whiskey, which began in the early 20th century.

The names may even have been a coincidence, but came to be linked together in the minds of many. Both were called KT.

In the 1980s, when Glenmore was still independent and looked like it might be one of the survivors of bourbon's collapse, a new KT's was erected on or near the original location near Louisville's Cherokee Park. Good bar. Good sandwiches. No connection to the distillery or the original bar, just a tribute, and still in a good location.

A Weird But Cool Career Milestone.

Although I generally don't practice, I am a lawyer, so it is both weird and cool for me to be cited in a Federal Appellate Court opinion, the Sixth Circuit's ruling in Maker's Mark v Diageo, a trademarks case.

It begins with Justice Hugo Black's famous statement (written in dissent) that, “I was brought up to believe that Scotch whisky would need a tax preference to survive in competition with Kentucky bourbon.” Justice Black grew up in Alabama.

After that there are several pages of American whiskey history, which is where I come in. It's easy to read, not at all legalistic, and very accurate. The legal point of it is that issues of brand identity and product integrity are of unique importance to whiskey producers due to events in the industry's history, and past Federal involvement going back more than 100 years to the Pure Food and Drug Act and subsequent Taft Decision.

The rest of this decision, where they get into the fine points of trademarks law and some of the specific claims and counterclaims of the case, gets pretty dense. It's hard slogging for a lawyer let alone a layperson. If, however, you are tempted to spout off about how "ridiculous" the decision is, force yourself to actually read and understand the opinion before you do. Trademarks law can be very complicated precisely because the courts go to great lengths to provide appropriate protection to intellectual property owners without overreaching.

The case involved the Maker's Mark red wax drip and a Diageo Jose Cuervo brand tequila that Maker's felt infringed. The trial court found for Maker's and the appellate court affirmed that decision.

For me, this represents a cool but weird milestone in my career. I'm cited five times by name, both to Bourbon Straight and to The Bourbon Country Reader, more than that if you count all the ids, op cits, and supras.

Appellate courts mostly cite to themselves and each other, so it's nice to get a word in edgewise. 

The United States courts of appeals (or circuit courts) are the intermediate appellate courts in the United States federal court system. There are 13 of them. The Sixth Circuit covers Kentucky, Ohio, Michigan, and Tennessee. It is located in Cincinnati.

The Deconsolidation Of Irish Whiskey Continues.

In 1966, all of the whiskey producers on the Emerald Isle became one company and consolidated production at two distilleries, Midleton in the South, and Bushmills in the North.

Both distillery complexes made both malt and grain whiskey using both pot and column stills. Bushmills made Old Bushmills and Midleton made everything else.

It stayed that way for more than 20 years and the company, which came to be known as Irish Distillers Limited (IDL), came to be owned by Pernod Ricard.

Then something amazing happened. The consolidation slowly began to reverse itself. In 1987, Dr. John Teeling founded a new distillery at Cooley in an old government-owned industrial alcohol plant. It too made malt and grain whiskey. It was successful.

In 1994, ownership of the Tullamore Dew Irish Whiskey brand was split off from IDL, but it continued to be made at Midleton.

In 2005, Diageo bought the Bushmills Distillery and the Old Bushmills brand from IDL.

In 2007, Cooley built a second (very small) distillery at Kilbeggan.

In 2011, Cooley was acquired by Beam, Inc.

In 2012, William Grant & Sons, owner of the Tullamore Dew brand, announced that it will build soon a new, $46 million distillery in Tullamore to make Tullamore Dew Irish Whiskey.

When that project is completed, there will be five distillery complexes in Ireland owned by four separate companies. Sadly, none are Irish-owned, but it does show that industry consolidation is not always a one-way street.

And don't feel too sorry for IDL. Its distillery at Midleton is still the biggest in Ireland and its leading brand, Jameson's, is still the number one Irish whiskey in the world. It has recently seen sales grow at a double-digit rate. Who knows, maybe Midleton will need to expand too pretty soon, or IDL will build another distillery someplace else.

American entrepreneurs, take note. You don't even need to start from scratch. The Charles Medley Distillery in Owensboro, Kentucky, is available. It needs some more work, and mostly new equipment, but the buildings are all sound, including seven warehouses with space for about 140,000 barrels.

The Rye Renaissance Is Finally Real.

The 'rye renaissance' has been a popular topic in the media for several years, but even though it was getting a lot of ink, producers weren't inking a lot of additional sales. (See, "The Rye Revival Is A Mirage," here.)

That's starting to change. Many brands, such as Sazerac Rye (i.e., 'Baby Saz') and Rittenhouse Rye Bottled in Bond are on allocation and shoppers sometimes find empty shelves. Templeton Rye has struggled to get enough whiskey from its distiller in Indiana to meet demand. Now add Wild Turkey to the list.

As Wild Turkey introduces a new Wild Turkey Rye at 40.5% ABV (81° proof), it is letting people know that the 50.5% ABV (101° proof) version will be in short supply for the forseeable future. Wild Turkey also makes Russell's Reserve Rye.

Jim Beam, which produces more rye than anyone else, doesn't seem too stressed. It's even bringing out a new one, under the Knob Creek name.

Another brand that seems to have plenty is Bulleit Rye, which just launched a few months ago. It's the same Lawrenceburg, Indiana-made rye as Templeton and several other brands. You have to believe drinks giant Diageo, which owns Bulleit, has a priority claim on any whiskey Lawrenceburg has ready, but even mighty Diageo can't make fully-aged rye whiskey out of thin air.

You can bet the new owner of Lawrenceburg Distillers Indiana, MGPI, is turning the dial on the rye machine there up to 10. This is why the aging cyle makes whiskey production planners prematurely gray. A few years ago, producers were wondering if the rye boom was real. Now they're wondering if it's here to stay.

Beam a "Very Scarce Asset," Says Key Investor.

I've written before about the newly pure-play Beam Inc. as a potential acquisition target. My skepticism came from looking at it from the industry side, and sizing-up the potential buyers such as Pernod and Diageo.

But another way of looking at it is from the perspective of Beam Inc.’s largest shareholder, Pershing Square Capital Management, which is led by activist investor Bill Ackman. Shanken reported today that Pershing Square held 20.8 million shares of Beam Inc., worth about $1.13 billion, at the close of 2011. That's roughly one-eighth of Beam’s current market capitalization.

In his third quarter letter to Pershing investors last November, Ackman wrote, “Beam now has many strategic alternatives available, including a sale of the business, a merger with another spirits company, and the acquisition of other brands. We believe the spirits industry will see significant consolidation over the next several years, and Beam’s leading global positions in Bourbon and Tequila could entice several bidders or merger partners in the future.”

Ackman added that Beam is now “the world’s only pure-play, publicly traded global spirits company that is not family controlled or influenced—in other words, it is a very scarce asset.” Beam has said repeatedly that it intends to be an acquirer and not a seller, which is how I see them going as well but, obviously, Ackman has a lot more skin in the game than I do.

The company’s comparable net sales rose 8% to $2.3 billion in 2011, led by a 7% increase for Jim Beam, as well as double-digit growth for Maker’s Mark, Courvoisier and Teacher’s and an exponential jump for its Skinnygirl cocktail brand.

Though burdened for many years as part of an old-fashioned diversified conglomerate, Beam's biggest growth spurts came by acquisition. In 1987, Beam was essentially a single-brand company (Jim Beam bourbon). That year it acquired struggling National Distillers, primarily to get the DeKuyper liqueurs brand, but it picked up a broad portfolio in the process, including several more whiskeys (e.g., Old Crow, Old Grand-Dad, Old Overholt).

Then, in 2005, Beam teamed up with Pernod to divide up the assets of Allied Domecq. That brought into Beam's stable many of the brands that are now contributing to Beam's success, including Sauza Tequila, Maker's Mark Bourbon, Courvoisier Cognac, and Teacher's Scotch.

Ackman is probably right about more industry consolidation, as the business becomes fully globalized.  If, for example, the Beckmann family were to deprive Diageo of Jose Cuervo in the current contract negotiations, Beam would be able to plug two of the biggest holes in Diageo's portfolio, American whiskey and tequila. That might prove irresistible to both Diageo and Mr. Ackman.

Beam Maybe Not In Play After All.

As I have written about here before, and also in the current (No. 97) issue of WHISKY Magazine, Fortune Brands will shortly become Beam Inc., a pure-play spirits company as opposed to a diversified conglomerate.

Ever since this plan was announced, industry observers have speculated that some rival will almost immediately acquire Beam Inc. and take it apart. The folks at Beam haven't commented but one can assume that is not what they have in mind. I have always said that such an outcome is not as likely as many people think.

Just-Drinks speculates that the price would be about $9 billion. Now Just-Drinks is also reporting that the two most likely suspects, Diageo and Pernod, both say they are not interested, at least not for the foreseeable future.

Diageo is devoting its resources to developing markets, such as China; while Pernod is still trying to reduce the debt it took on to buy Absolut three years ago.

Many factors bear on whether or not any public company will become a takeover target. A big one will be how Beam Inc. stock trades when it is finally on the Big Board without golf balls and faucets holding it back.

Coming Soon: The Bulleit Experience At Stitzel-Weller Distillery.

Several years ago, at WhiskeyFest here in Chicago, I was chatting with a Diageo executive who opined that they would eventually have to do something about creating a "home place for Bulleit." What's a "home place"? Think of it as a distillery substitute. You can't visit the Bulleit Distillery because there isn't one.

What does Bulleit have to do with Stitzel-Weller? Nothing, except Diageo owns both of them. Stitzel-Weller is the old Van Winkle family distillery. Diageo has owned it for more than 20 years. The distillery itself has been dark since 1992, but they use the warehouses to age bourbon distilled for them by others, and may be using other parts of the facility too.

Although Diageo has never confirmed this, I'm pretty sure Bulleit is aged at Stitzel-Weller.

The Stitzel-Weller Distillery is located just south of Louisville in the suburb of Shively, where there were once dozens of distilleries. It was built just after Prohibition ended and operated for 60 years. Until Maker's Mark it was the only distillery making wheated bourbon. Its brands were Old Fitzgerald, W. L. Weller, Old Rip Van Winkle, Cabin Still, and Rebel Yell, none of which Diageo still owns.

According to the announcement, Tom Bulleit and his team are very excited about this  opportunity to share more about Bulleit while giving folks a close look at one of the most legendary distilleries of its time. Stitzel-Weller will also serve as Tom’s place of business when he is in Kentucky.

I haven't been inside the fence since 1996, so I'm excited too.

Pappy Van Winkle built Stitzel-Weller to be a showplace as well as a working distillery. It is great that this important landmark will be preserved and people will be able to experience it.

They haven't announced when it will be open to the public. I'll keep you posted as I learn more.