No, the Booze Business Is Not 'Thriving'

On Tuesday, Vinepair published an article by Tim McKirdy entitled, "What's Fueling the Billion-Dollar Bourbon Boom?" In it he writes, "It's no secret that liquor sales have thrived during the coronavirus pandemic." 

Not only is it not a secret, it's not true. What has thrived has been at-home drinking and hence liquor stores sales, what the industry calls "off-premise." Yes, off-premise is thriving but on-premise, meaning bars and restaurants, is dying. The one has not offset the other so overall liquor sales are down or, at best, flat.

How bad is it?

IWSR is one of the leading research companies serving the alcoholic beverage business. Back in May, they put out a press release with this headline and subhead: "Beverage Alcohol Not Expected to Rebound Until 2024. Global Alcohol Consumption Grew Last Year, However, New IWSR Research Forecasts That Covid-19 Will Push 2019 Volume Gains Back By 5 Years."

That's the real story.

They elaborate: "Total global alcohol consumption, led by increases in beer and ready-to-drink products, grew by +0.1% in volume and +3.6% in value in 2019, but losses in the months-long near complete shutdown of bars and restaurants across the world this year has not been offset by upticks in liquor retail and ecommerce. IWSR expects this to lead to double-digit declines in 2020, which IWSR estimates will take until 2024 to reach 2019 pre-Covid-19 levels (though in the UK and US, IWSR forecasts that pre-Covid-19 beverage alcohol volume levels likely won’t return until after 2024.) Global travel retail, severely affected by widespread travel restrictions, will see a particularly harsh decline in 2020 but is expected to reach pre-crisis levels by 2024."

Did you catch the caveat about the US and UK? They predict recovery some time after 2024, and they aren't prepared to say how much after. Yes, this release is from May, but has anything happened since then that would make the outlook rosier?

I got into the beverage alcohol business at about the time the American whiskey industry collapsed. For years after that, industry observers predicted a rebound was "just around the corner." It wasn't. It took about 40 years. Only now, as in 2019, has whiskey production (as in new distillate going into barrels) exceeded the previous high-water mark. As McKirdy notes, in 2019 "Kentucky distillers filled more than 1.7 million barrels of bourbon — nearly four times greater than 1999’s total. Production in the Bluegrass State ... is the highest it’s been since 1972, according to data from the Kentucky Distillers Association (KDA)."

Production in the other big production state, Tennessee, is similarly at record levels.

It's bad all over. Last month, a study prepared by the Distilled Spirits Council (DISCUS) and the American Distilling Institute showed that craft distillers have lost 41 percent of their sales, worth more than $700 million, since the shutdowns started earlier this year. Thirty-one percent of their employees have been furloughed. 

Craft distillers have been hit so hard because sales at the distillery are such a big percentage of their total sales. About 40 percent of craft distillers make most of their sales at the distillery. Most craft distilleries have seen those at-the-distillery sales decline and 15 percent say their distillery store is completely shut down. 

But the worst hits are happening with on-premise retail; bars and restaurants. Those who haven't thrown in the towel are struggling to survive. Millions are out of work. No one is thriving.

There is a lot of denial around this crisis, driven by partisan politics. But if you're willing to look at the facts in a clear-eyed way, it's possible to get a picture of what's really going on and what happens next. I'm lucky because I'm mostly retired. Like everyone I've lost some income streams, but most people have it much worse than I do. If I have any advice it's just this. 

Be realistic. 

The Production of American Whiskey Today and How It Got That Way

Diageo's 2017 Bulleit Distillery near Shelbyville, Kentucky.

American whiskey may be the greatest comeback story of all time. Left for dead a half-century ago, today it bestrides the world. 

Although it seems like we have been talking about the 'bourbon boom' forever, the industry has grown only recently in terms of the number of distilleries producing American whiskey and the number of different companies involved. The biggest players have gotten and are getting much bigger, and there are several newcomers. It's a new ball game and the biggest changes have occurred in the last four years.

Is it enough? Is it too much? No one can know for sure, but at least you can be well-informed about where we are and where we seem to be headed.

If, that is, you read the new issue of The Bourbon Country Reader. It drops today. This is the third in our "How It Got That Way" series.

Current Reader subscribers should receive their copies in a few days. New subscribers can get on the bandwagon by clicking here.

Born in 1993, in the 201st year of Kentucky statehood, The Bourbon Country Reader is the oldest publication devoted entirely to American whiskey. It is a charming mix of news, history, analysis, and product reviews. Do you worry that advertising spending influences coverage in other publications? No chance of that here since The Bourbon Country Reader is 100 percent reader-supported. It accepts no advertising.

To experience The Bourbon Country Reader for yourself, you need to subscribe. Honoring history, The Bourbon Country Reader still comes to you exclusively on paper, in an envelope, via the USPS. Doing our part to keep the USPS solvent, we use only First Class Mail.

A subscription to The Bourbon Country Reader is still a mere $20 per year for addresses in the USA, $25 for everyone else. The Bourbon Country Reader is published six times a year, more-or-less, but your subscription always includes six issues no matter how long it takes. For those of you keeping track, this new one is Volume 20, Number 2.

Click here to subscribe with PayPal or any major credit card, or for more information. Click here for a free sample issue (in PDF format). Click here to open or download the free searchable PDF document, "The Bourbon Country Reader Issue Contents in Chronological Order." (It's like an index.)

If you want to catch up on what you've missed, bound back issue volumes are available for $20 each, or three for $50. That's here too.

If you prefer to pay by check, make it payable to Made and Bottled in Kentucky, and mail it to Made and Bottled in Kentucky, 3712 N. Broadway, PMB 298, Chicago, IL 60613-4198. Checks drawn on U.S. banks only, please.

Whiskey Yoda Says, "There Is No Best, Only You Like Best"

Au Cheval, a restaurant here in Chicago, makes a double cheeseburger that Food Network’s 'Top 5 Restaurants' program named the best burger in the U.S. There have, of course, been many ‘best burger’ lists, also best pizza, best candy bar, best breakfast, best ice cream, best cereal, best barbeque, best snack, and of course best whiskey.

While I’m happy for the folks at Au Cheval, and I think it’s great when people are applauded for their accomplishments, I despise these lists, all of them, especially the whiskey ones. I believe the people who make them and the people who believe and rely on them have a serious character flaw. At least one. This is, therefore, just a vent. I am under no illusion that this will change anyone’s mind. At best, it might give a little comfort to others who agree with me.

'Best’ is an illusion. There is simply no such thing without some sort of objective criteria, like weight, length, or height. Biggest burger is a real thing, best burger is not. It’s subjective, the judgment of one person or, maybe, a group of people. They certainly didn’t sample every burger in America, or even a small fraction of them. They say they have found the best burger in America but that's a lie. They have done no such thing.

The people who commission and make these lists are engaging in a tremendous act of hubris, choosing their favorite of something and declaring it ‘the best.’ Tallying the subjective opinions of several people does not render them objective. Everyone is entitled to have favorites but declaring that your favorite is ‘the best’ is narcissistic. Who are you to judge? Your taste is superior to mine? You've eaten more burgers than I have? Get over yourself! Better to tell the truth.

With whiskey, “what’s the best bourbon?” is the question I'm asked most often, usually followed by “what’s your favorite bourbon?” when I demure on the first question. When asked these questions I am friendly and polite (usually) and try to give a satisfying answer, naming four or five personal favorites, but what I really want to do is turn and run away, lest I start to lecture them about the need for a complete life change.

If you really could determine the 'best bourbon,' you might regret it. I like to try new things but if I know what the best is, why bother? Taste a new whiskey because it just might be better than the best? What are the chances? What a desolate life, either eating or drinking only one thing, albeit somebody's idea of ‘the best,’ or eating or drinking various but always inferior things. Don't rank, enjoy the splendor of diversity.

The 'quest for the best' is a cheat. Drinking something because you've heard it’s ‘the best bourbon in the world’ (you know which one I mean), and telling everyone that’s why you drink it, doesn’t tell me you're an accomplished bourbon connoisseur. Just the opposite. It tells me you're lazy and want a short cut route to this and probably everything else. You're unwilling to do the work of connoisseurship, which is also its greatest reward. Your judgment is of no interest to me because you have shown none. I should feel sorry for you because you're missing the best part, but in fact I think you're a jerk.

I read some of these lists, because I might see something I’d like to experience, but the ‘b’ word always turns me off. It continually gnaws at me. Are we such children that we would find a program called ‘Five Really Good Hamburgers and Where to Find Them’ insufficiently compelling? Guy Fieri may be irritating but I respect the fact that every program is filled with “the greatest diners, drive-ins and dives.” He never feels compelled to rank them at the end of the season. He loves everything. Sure, some diners, drive-ins and dives aren't so great. That’s why they're not on the show.

At law, calling your company, service or hamburger ‘the best’ is considered ‘puffery.’ That’s the actual, legal word for it: ‘puffery.’ It is defined as a promotional statement or claim that expresses subjective rather than objective views, which no 'reasonable person' would take literally. The Federal Trade Commission defines puffery as a "term frequently used to denote the exaggerations reasonably to be expected of a seller as to the degree of quality of his product, the truth or falsity of which cannot be precisely determined."

Let that sink in for a moment. You can't claim you're the oldest or the biggest or the most popular unless you are and can prove it, but you can claim you're 'the best' even if you have nothing to back it up. The puffery rule means that if you say you're ‘the best,’ no one can sue you by arguing you're not, no matter how bad you are. The claim is not subject to proof and is, therefore, not actionable.

I could get serious for a moment and suggest that people who believe there is a best hamburger or best bourbon may also believe there is a best way to solve any problem, as in only one right way. They may also believe there is only one right way to configure a family, educate children, govern a country, make love, art, or tea. They may believe there is only one true God. And there is a good chance that anyone who does not prefer the one true hamburger is apostate and not to be trusted.

Off with their heads.

‘The best’ sounds serious, important, hard to ignore. A similar meaningless claim you hear all the time is 'none better,' as in, "no one beats our prices." While that seems like a superlative, it's not. What it really means is, "our prices are about the same as everybody else's."

Despite all that, 'the best' attracts eyeballs in our clickbait world.

By the way, I no longer judge whiskey competitions, mainly because I don't enjoy it.

When you're doing it in a group, the social part is fun. If you're doing it by yourself at home it is tedious. Having been on the inside of major international whiskey competitions does not make me take them more seriously, just the opposite. I'd rather be drinking Wild Turkey.

But I'm just venting. Nothing to see here. Move along.

My Favorite Dick Perry Story

One of Dick Perry's 20 books, a history of Cincinnati radio station WLW.

(WARNING: No Bourbon Content.)

Dick Perry was a journalist in Cincinnati and Chicago, the author of 20 books, six plays, and hundreds of articles. When I knew him, I was in college at Miami University and he was living in Oxford, stringing for the Cincinnati Post. We got to know each other when he was reporting on the campus anti-war demonstrations in which I participated (1969-1973). We became friends and I always enjoyed seeing him. He was the classic ink-stained wretch, in a shabby trench coat, always lurking inconspicuously just around the corner like the pro journalist that he was. He was about the same age as my dad.

My favorite Dick Perry story took place on election night, 1972. I was covering it at the Butler County Courthouse in Hamilton for WOXR in Oxford, and he was covering it for the Post. At some point in the evening, Dick caught my eye and motioned for me to follow him. He led me through the dark corridors of the empty courthouse until we came to an office. The door wasn't locked so we entered. Dick turned on the lights. He motioned for me to sit, as we both did.

"Chuck, as you know," he said. "It is illegal to consume alcohol in the Board of Elections on election night. This, however, is the Board of Education." From the pockets of his trench coat he produced two bottles of beer, which we proceeded to open and consume before returning to our work in the Board of Elections.

Crazy Conspiracy Theories Are Nothing New

1851 logo for the Proctor & Gamble Company.

(WARNING: No Bourbon Content.)

Crazy conspiracy theories like Pizzagate, spread by followers of QAnon, are nothing new. They even pre-date the Internet. Here is one example from the 1980s.

Proctor and Gamble (P&G) is a very large American consumer goods company. It is also a very old company by American standards. It was founded in 1837, in Cincinnati, Ohio, by William Proctor, a candlemaker; and James Gamble, who made soap. They were also brothers-in-law.

Today, P&G is a gigantic international company that makes household-name products such as Bounty, Crest, and Tide.

As a 19th century company, they had a very 19th century logo. The thirteen stars represented the original thirteen states and the man in the moon was a popular decorative device. Pictorial 'brands' were important at a time when literacy was not universal.

Although deemphasized and simplified over time, the company continued to use the logo in small ways well into the modern era. Then the rumors started that the symbol was satanic, that the curls in moon man's beard were an inverted 666, the 'mark of the beast.' The curls at the top and bottom of the beard were Satan's horns. By playing connect-the-dots with the 13 stars you can make '666' emerge for a second time, and everyone knows the reference to the Beast's number in Revelation is in chapter 13.

This, of course, led to more rumors, such as the persistent one that the president of P&G pledged the company's profits to Satan on an episode of the Phil Donahue Show (he didn't).

P&G tried to debunk the rumors but it only fueled the fire. The corporate logo wasn't a very important part of the company's marketing, since all of their brands had strong individual identities, so they simply retired it.

That was, of course, a distant 40 years ago. People would never fall for something that ridiculous today.

Diageo Says New Kentucky Distillery Will Be Carbon Neutral

(DIAGEO PRESS RELEASE) Diageo announced today that its new Kentucky whiskey distillery, which will distill Bulleit Bourbon and other brands, will be carbon neutral – one of the largest in North America, and a first for Diageo. Reinforcing Diageo’s global commitment to reducing its carbon emissions and addressing climate change, the site will be powered by 100 percent renewable electricity, with a capacity to produce up to 10 million proof gallons per year.

The new distillery, currently under construction in Lebanon, Kentucky, reflects Diageo’s commitment to achieving net-zero carbon emissions and moves the company closer to its goal of sourcing 100 percent of its electricity from renewable sources by 2030. Employing electrode boilers, the site will utilize a mix of renewable electricity sources to power a 72,000 square-foot distillery, dry house, and warehousing facilities. As previously announced “The Diageo Lebanon Distillery” will have the capability to distill a variety of bourbon and American whiskey brands. Bulleit will be the first and lead brand produced at the new distillery – supplementing existing production at The Bulleit Distilling Co. in Shelbyville, Kentucky. This move will further strengthen the brand’s commitment to a more sustainable future.

“As a company we know that our long-term sustainable growth depends on reducing our reliance on fossil fuels that contribute to climate change,” said Perry Jones, President, North America Supply for Diageo. “This groundbreaking undertaking to electrify our operations and then power them with renewable electricity will result in one of the largest carbon neutral distilleries in North America. This is a significant step to strengthen our commitment to minimizing our carbon emissions and will result in an important reduction of Diageo’s environmental impact on a global level.”

“For Bulleit, our passion for sustainability began when we built the Bulleit Distilling Co. in Shelbyville, where we focus on reducing carbon emissions, water conservation and waste management during production. Then, when we opened our Visitor Experience there, we chose to implement practices like eliminating single use plastics from our bar and sourcing locally-grown organic cocktail garnishes from our onsite garden,” said Sophie Kelly, SVP Whiskies, Diageo NA. “Our commitment to the environment evolves with the Lebanon distillery, where no fossil fuels will be consumed for the production of Bulleit. This allows us to really begin to double down on our ambition to reinvent category standards.”

To achieve carbon neutrality at the site, Diageo plans to incorporate a variety of features that will avoid annual carbon emissions by more than 117,000 metric tons. This is the equivalent of taking more than 25,000 cars off the road for a year.

These features include:

Electrification of operations:

Electrode boilers avoid the direct carbon emissions that would normally be generated by the use of fossil-fuel fired boilers. Electrode boilers also offer benefits that include reduced noise pollution and reduction of other air contaminants. All vehicles operated onsite, including trucks and forklifts, will be electric, and charged onsite by renewable energy. One-hundred percent of the steam used onsite – for the cooking, distillation and drying process – will be generated by the electrode boilers.

Energy efficiency embedded into facility design: 

Energy efficiency will be optimized in the new electric boilers. Exterior lighting will be solar powered. All onsite interior lighting will be light-emitting diode (LED). Warehouse interior lighting will only activate during loading or unloading activities. Lowered roofs will minimize heating and cooling requirements.

Sourcing renewable electricity:

Long term contracts with the local utility will allow for the purchase of zero greenhouse gas emission electricity from certified renewable sources. Renewable electricity will be supplied by Inter-County Energy and East Kentucky Power Cooperative (EKPC).

Water savings design:

The site is designed to be industry-leading in efficiency and minimize water usage.

Zero waste to landfill:

Once operational, the site will minimize use of materials and waste through reuse and recycling, and any residual waste will not be sent to landfill.

A New Future

“I welcome Diageo’s commitment to carbon neutrality and using renewable electricity at its Bulleit distillery in Lebanon. This is a notable example of a historic Kentucky industry embracing a new future,” said Kentucky Governor Andy Beshear. “To continue the commonwealth’s economic recovery, attract business investment and create jobs for Kentuckians across all counties, it’s important we and our economic development partners provide a cost-competitive energy mix. Energy diversity is something more industries are considering when they choose where to locate, and offering the right mix will help us provide a brighter future for generations to come.”

“We want to extend a warm welcome as Diageo makes this valuable investment in Lebanon-Marion County,” said Jerry Carter, President and CEO of Inter-County Energy, which will provide electric service to the Lebanon distillery. “Inter-County Energy is proud to work in partnership with Diageo and East Kentucky Power Cooperative (EKPC) to understand the energy needs of this facility and to develop innovative ways to meet the sustainability goals of one of the largest renewable energy consumers in Kentucky.”

A Commitment to Sustainability

Committed to decarbonization with approved science-based targets, Diageo is part of a pioneering group of organizations that are championing a green recovery and supporting Sustainable Development Goals, through membership of the United Nations Global Compact, We Mean Business Coalition and other key global advocacy organizations. Also, as mentioned above, as a signatory to RE100, Diageo aims to source 100 percent of its electricity from renewable sources by 2030. In addition, Diageo has signed onto the global Race to Zero campaign, a commitment to achieving net-zero carbon emissions by 2050. The company recently joined over 150 multinationals to reaffirm our commitment to Science Based Targets and urge governments around the world to align their COVID-19 recovery efforts with the latest climate science.

Bulleit has a long-standing commitment to sustainability at their current distillery in Shelbyville, KY, which was recently honored with the title of ‘Highly Commended’ for Sustainable Distillery of the Year at Whisky Magazine’s 2020 Icons of Whisky American Awards. The Shelbyville site includes the first ever industrial solar array in Shelby County, and a focus on reducing their carbon footprint by sourcing local ingredients from local farmers.  In addition, Bulleit implemented thoughtful practices at the Visitor Experience, such as a partnership with the non-profit Oceanic Global to ensure its tasting experience and cocktail bar aligns with The Oceanic Standard (TOS), a badge and certification for venues that have adopted sustainable operating practices and are committed to eliminating single-use plastics.

Investing in Kentucky

Bulleit continues a strong trajectory of growth, with the brand continuing to gain share, and global volume up more than six percent year over year. Diageo broke ground on the $130 million distillery in July of 2019, and the site is expected to be fully operational in 2021. Once fully operational, the facility will employ 30 full-time team members. Since 2014, Diageo has invested more than $500 million in Kentucky. This facility will supplement the company’s other Kentucky operations: Stitzel-Weller in Louisville, and The Bulleit Distilling Company and Visitor Experience in Shelbyville.

Notes:

Carbon neutrality of Diageo’s new Lebanon, Kentucky distillery for all Scope 1 and 2 emissions from site operations will be achieved by Diageo in accordance with PAS 2060 for the period commencing with the first grain delivery to completion of distilling operations, certified by Jacobs Engineering Group Inc. View the PAS 2060 Qualifying Explanatory Statement. Through sourcing for renewable electricity and the electrification of operations, the site will only require residual amounts of carbon offsets to be purchased, associated with operational elements

New Reader Sets Its Sights Further South Than Usual

Fermenter being filled at Cascade Hollow Distillery, Tullahoma, TN

Whiskey history is weird, especially Tennessee whiskey history.

Tennessee whiskey is a modern creation with ancient roots and it's a whiskey many drinkers still struggle to understand.

For much of its history, "Jack Daniel's" and "Tennessee whiskey" have been synonymous. It didn't start out that way and with how things are going, it won't be that way much longer.

All of that is a tease for the new issue of The Bourbon Country Reader, which is out now.

I haven't published since February. Blame the pandemic. Anyway, it's back, and taking a deep dive into Tennessee whiskey.

Current Reader subscribers should receive their copies in a week or so. New subscribers can get on the bandwagon by clicking here.

Founded in 1993, The Bourbon Country Reader is the oldest publication devoted entirely to American whiskey. It is a charming mix of news, history, analysis, and product reviews. Do you worry that advertising spending influences coverage in other publications? No chance of that here since The Bourbon Country Reader is 100 percent reader-supported. It accepts no advertising.

To experience The Bourbon Country Reader for yourself, you need to subscribe. Honoring history, The Bourbon Country Reader still comes to you exclusively on paper, in an envelope, via the USPS.

A subscription to The Bourbon Country Reader is still a mere $20 per year for addresses in the USA, $25 for everyone else. The Bourbon Country Reader is published six times a year, more-or-less, but your subscription always includes six issues no matter how long it takes. For those of you keeping track, this new one is Volume 20, Number 1.

Click here to subscribe with PayPal or any major credit card, or for more information. Click here for a free sample issue (in PDF format). Click here to open or download the free PDF document, "The Bourbon Country Reader Issue Contents in Chronological Order." (It's like an index.)

If you want to catch up on what you've missed, bound back issue volumes are available for $20 each, or three for $50. That's here too.

If you prefer to pay by check, make it payable to Made and Bottled in Kentucky, and mail it to Made and Bottled in Kentucky, 3712 N. Broadway, PMB 298, Chicago, IL 60613-4198. Checks drawn on U.S. banks only, please.