Whisky Advocate

This is just the beginning of craft distiller buyouts. Count on it!

September 25th, 2010

I have so much rattling around in my brain right now, I’m putting up this bonus weekend post before my evil twin takes over on Monday.

This past year we saw the Anchor Distilling Co. sold to the Griffin Group. Then we also  saw Tuthilltown Spirits “Hudson Whiskey” brand sold to William Grant.

This is just the beginning. Count on it!

Make a list of the most reputable craft distillers (both here and abroad) who are putting out a clean product with strong business models, and I willing to bet that most all, if not all, have been approached by larger companies who want to buy them. In fact, I feel quite certain that there will be more announcements of alliances between craft distillers and larger companies in the future.

Why? Craft distillers need the money. They want to make a quality product, but they are also faced with mounting bills and need to put out something to pay off these bills. That’s why you’re seeing a lot of young whiskeys put out on the market–many of them too young!

An infusion of capital will allow them to invest in quality equipment, storage facilities, and barrels. They will be able to hire distillers (and consultants) who know what they’re doing. Moreover, it will allow them to age their product longer so it is fully matured before being put on the market. They will be able to increase production. Plus, the right buyer will get their product into distribution channels, increasing circulation–and sales!

It all makes sense. It’s going to happen. Again and again.

Care to take a guess at who you think will be next?

18 Responses to “This is just the beginning of craft distiller buyouts. Count on it!”

  1. sam k says:

    Very interesting. Considering that so many craft distilleries don’t do whiskey, many are not on our particular radar. Maybe Starnahan’s, who has done an excellent job with all aspects of the business:production, product quality, discreet brand extension, marketing, distribution, etc. Actually, I’m surprised they didn’t get bought before Tuthilltown.

  2. Hopefully as size increases, quality will keep getting better, and the “craft” will remain as a part of the way the products are made, marketed, and sold… hopefully.

  3. Red_Arremer says:

    Berkshire Mountain Distillers, Stranahan’s of course, and someone is going to want see what can be done with the Forty Creek brand. I see it for McCarthy’s too especially with all the interest in peat lately.

  4. Jason Pyle says:

    I think I’d argue it would be a great thing for the craft movement if this happens. I certainly think it most likely would strengthen the products they put out and a lot of the desperation to subside. Good for the consumer.

    I don’t however believe as many have been approached as we might think. The market is littered with very very small producers. The Hudson Line has been out for a LONG time (early 2000??) and it just happened for them a few months back. I realize there’s a whole lot bigger head of steam today than when they first got cranking, but there’s still a lot of small small producers and few in the 5000 case plus production. Is it worth it for a big boy to buy a distiller only popping out a few thousand cases? I don’t think so. The little guy may want that but it’s the big boy that has to see the value in it first.

    But with that said, there’s a number of possibilities out there. Sam mentions Stranahan’s and that’s definitely up there. Their production is enough now that they’d have to be a pretty high target.

    As Matt mentions, hopefully a company that does purchase an established craft distiller is doing so because they recognize that “spirit” and ideal and keep it alive.

  5. Joshie says:

    Finger Lakes, Corsair, New Holland and Ransom are four more that come to mind.

    One that has been TRYING to sell for a while but as far as I know has not found a buyer is Belmont Farms, maker of Virginia Lightning, the best unaged corn whiskey on the market, imo. They also make a pretty dreadful applewood infused corn whiskey (Kopper Kettle?). I always thought that spirit had a lot of potential and would make a great bourbon or at least a more convential aged corn whiskey.

  6. Mr Manhattan says:

    I guess I have to wonder what mergers would do for the pricing of some of these craft products, almost all uniformly overpriced in my opinion, particularly the Hudson stuff ($100+ for 750 ml). Either quality has to come way up or pricing has to come down.

  7. Whisky Party says:

    Clear Creek. To my mind, the McCarthy’s Peated Oregon Whiskey is one of the best American Craft Whiskey on the market.

  8. MrTH says:

    Hmmm, happens in publishing, too, doesn’t it?

  9. Barry Jay says:

    It might be interesting to know if they want the recipe or the actual operation…just like the take overs in corporate America. Dogfish beer produces their spirits in a tiny room in the back of their Pub (that was back in 2007 – a picture from back then ). I brought home a bottle of their rum and cracked it open for some devoted rum drinking buddies and they raved about it..said it was the best they ever had. Looking at the operation at the time, it would be hard to recreate the Mojo that produces it.

  10. Marc says:

    Isn’t this how it all starts? Small craft distillers get bought out, which from the comments above is a good thing as it will then allow them not to rush their product and increase availability. But then they keep growing. Then in 20 years time people start saying they wish these big distillers would be more personal and that the big companies that own them seem more interested in sales and profits and not the actual product. Next thing there are distillery only releases and a manager’s range and a special limited yearly release, etc. etc., and then we cry fowl and boycott them.. 🙂 lol

    • Red_Arremer says:

      Of course you’re joking. But the those boycott’s were directed at big corporate owners not big distilleries. Glenfarclas is a big super-established, very well respected distillery, but it’s family owned– and perhaps that’s reflected in the way they priced their new 40 yo only a little higher than the manager’s choice 9 yo Oban.

      It’s easy to root for an independent operation, not just because it may be an underdog, but also because you know what your rooting for– the producers of a product you like. It’s harder to root for a mega-corporation or trust, because it is not 100% committed to any of its possessions, and may drop, dismantle, premiumize them or whatever at any time. Whisky lovers can root for whisky producers and business lovers can root for big businesses– of course there’s some overlap between those groups.

  11. Andre Girard says:


    Do you thing by buying Thuthilltown, it would be easier for the Wiiliam Grant group to experiment on whiskies, more than they would be able to do it with their scottish distilleries (under SWA regulations) ?

  12. Michael says:

    I am always wondering why there is such a need to experiment at all. Is it not better to focus on maintaining good quality and consistency of existing, well established products? It bothers me that every distillery wants to release tens of different finishes and “new and unique” whiskies. Even Amrut got into this race (with a vengeance, by the way).

  13. J says:

    Personally, I don’t see bigger companies buying rights to craft distillers as a good thing.

    1) I believe it encourages poor marketing behavior on the part of craft distillers. If they see a few brands getting paid more for the marketability of the product than for the quality, it’s going to encourage others to spend more effort and money on packaging, marketing and nation wide roll-outs. When the focus strays away from making quality products consumers lose.

    2) Once a larger company becomes involved, they have a different goal in mind. The hallmark of craft distillers is making unique, one of a kind products produced in small batches to high standards. I would imagine a larger company has stock holders to pay and the focus shifts to only making marketable and profitable products. Once again the consumer loses.

    I love where the craft distilling movement is at. For the most part you have some very creative people producing some great product. There are a few clowns that are out there just marketing contract distilled nonsense, but consumers are getting wise to that.

    Just my two cents.

  14. Bill says:

    Does the sale of Anchor Distilling really support your argument? Fritz Maytag was ready to sell the brewery and distillery, sought a way to sell it to the employees, failed to do so, then got a deal together with Griffin after much due diligence. He didn’t need the money — in fact he had capped the growth of the brewery because he didn’t want it to get any larger than it was. Selling everything outright — isn’t the model you’re suggesting more one of people buying into craft distilleries, but the original owners still keeping a share?

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