Whisky Advocate

Diageo Building a New Distillery in Kentucky

May 29th, 2014

We just got the following information, confirming rumors and inside information we’ve been following for almost a year. Diageo is planning a new distillery in Shelby County; the location will be somewhere on a line drawn roughly between downtown Louisville and Frankfort, north of I-64. Here’s what Diageo released to us about 15 minutes ago.

Rendering of the proposed distillery

Rendering of the proposed distillery

Diageo Announces Intention to Invest an Estimated $115 Million to Build Distillery in Shelby County, Kentucky

Investment signals commitment to high-growth North American Whiskey category

SHELBY COUNTY, Ky., May 29, 2014 – Diageo today announced its intention to invest an estimated $115 million over three years to build a 1.8 million proof gallon (750,000 9-liter cases) distillery and six barrel storage warehouses in Shelby County, Kentucky.  While finalization of these plans is still subject to approval by local government, the project will represent a significant investment in Kentucky’s growing bourbon industry.  The proposed facility will distill a number of current and future Diageo bourbon and North American Whiskey brands.

Diageo will purchase approximately 300 acres of property located on Benson Pike in Shelby County.  The company expects that the construction project will provide a significant number of jobs and anticipates employing approximately 30 people for whiskey distillation and maturation.

“This proposed investment in Shelby County, in the heart of Kentucky bourbon country, will cement our commitment to expanding our share of the American whiskey category,” said Larry Schwartz, President, Diageo North America. “Diageo has a long tradition within the craft of whiskey-making and we look forward to bringing this artisanship to the new distillery. The distillery will build on our presence in Kentucky and we are committed to being a productive member of the local community.  We are very thankful for the support we have received thus far from state and local officials and look forward to a long and fruitful working relationship.”

“Today marks another feather in the cap for Kentucky’s bourbon industry,” said Governor Steve Beshear. “Distilled spirits remain a marquee industry in the Commonwealth, and Diageo’s new distillery will ensure that even more Kentucky bourbon is enjoyed around the globe. I want to thank Diageo for investing in Shelby County, and I look forward to seeing the distillery in action.”

“The Shelby County Fiscal Court is very excited that Diageo is proposing to expand its worldwide distillation operations by building a state-of-the-art distillery in Shelby County.  We look forward to a great partnership with Diageo and we welcome them to the community,” said Shelby County Judge-Executive Rob Rothenburger.

“This is a fantastic investment for Shelby County.  It further solidifies our community as one of the fastest growing and business friendly areas in Kentucky,” said State Senator Paul Hornback (District-20).  “We are thankful for the positive economic impact this will bring and are proud that bourbon, a signature industry of Kentucky, will now be made right here in Shelby County.”

“Diageo is a name known around the world for their large portfolio of leading spirits brands and we are grateful that they have chosen Shelby County as the home base for their distilling operations in Kentucky.  This $115 million investment in the community will benefit our citizens for years to come.  I look forward to working with Diageo as their Kentucky bourbon operations grow and I welcome them to this district,” said State Representative Brad Montell (District-58).

“We couldn’t be more thrilled for the company and the Shelby County community, as this major distilling center will bring jobs and increased investment to the region,” said Eric Gregory, President of the Kentucky Distillers’ Association, of which Diageo is a long-time member.  “We applaud Diageo for its continued commitment to Kentucky and our signature Bourbon industry, and look forward to toasting this incredible landmark at its opening.”

Over the last year, Diageo’s momentum in North American Whiskey has accelerated with both flagship and new-to-world brands. Fuelled by flavor innovations and consumer demand for premium brands with authenticity, bourbon is currently the fastest growing spirits category in the U.S., enjoying 14% value growth for the latest 52 weeks[1]. This popularity is mirrored globally, with the super-premium price segment growing 24% over the last three years[2].

The proposed distillery will be designed to fit in with the surrounding countryside and during construction, Diageo will take measures to conserve the natural landscape in the area.  Approximately 100 acres of land around the property line will act as a natural barrier to site operations.  Diageo North America has a strong record of achieving zero waste to landfill in its operations, and the company aims to achieve the same in Kentucky. Diageo also plans to collaborate with the local community for the recycling and reuse of materials generated from the proposed facility.

Diageo announced in February that it will be opening a Visitor Center at its legendary Stitzel-Weller Distillery in Louisville.  Diageo hopes that the Stitzel-Weller Visitor Center will soon be included on the Kentucky Bourbon Trail® tour.

On June 10, Diageo will hold an Open House to discuss the plans for the proposed Shelby County distillery, answer questions and hear from members of the public from 2:00 to 7:00 pm at the Shelbyville Country Club, 47 Smithfield Road, Shelbyville, Kentucky. A public hearing will be held on June 17 at 6:30 pm at the Stratton Community Center, 215 Washington Street, Shelbyville, Kentucky. Diageo hopes to receive approvals and to break ground in the coming months with the goal of having the distillery operational in late 2016.

17 Responses to “Diageo Building a New Distillery in Kentucky”

  1. Dawn says:

    I’m excited. Visited Stitzel-Weller in May. Loved it.

  2. Michael Dereszynski says:

    It would be nice to see a press release from the Big D,
    announcing their plan to increase production of American White Oak trees to insure future supplies for all the casks that will be needed to hold all of their whiskey

  3. John Hansell says:

    Some of you may remember my posting a while back about Diageo’s intentions to begin distilling again at Stitzel-Weller. At the time, that truly was their plan. However, numerous issues, including lack of adequate water supply and mold, led them to looking for an alternative distilling site.

    • Tadas A says:

      It is a pitty that Diageo decided not to resurect Stitzel-Weller distillery :( Diageo is a marketing oriented company and they are missing big on capitalizing on Stitzel-Weller brand value.

      How did Stitzel-Weller work for decades if it did not have an adequate water supply?
      What is the mold issue there? Mold is everywhere in the air and no way to avoid it.

      • Lew Bryson says:

        Louisville has grown significantly since S-W shut down, and water is an issue, even with the Ohio River right there. Bourbon-making takes a lot of it. The mold has become an issue because of lawsuits that have been filed in Kentucky over the black mold peculiar to the areas around distilleries; Diageo likely wants to avoid them, because at this point in time there’s no telling which direction they will go. This is a potentially huge financial issue for distillers. There’s another factor: asbestos. Restarting S-W would require millions in asbestos removal and replacement, and take years. It would be nice to see distilling start up at Stitzel-Weller again, but I just don’t see that happening.

      • John Hansell says:

        I think it’s fair to assume that the production levels (and water demand) over the next ten years are much more than what was back at S-W back in the 1980s.

        • TR says:

          It’s a smart move even if water supply and mold weren’t problems. There’s no chance the Diageo S-W product could meet the hyped up expectations of the whiskey community in general and the Pappy lovers in particular.

          • Tadas A says:

            Why could not new S-W distillery meet expectations? It would be real S-W. Buffalo Trace was successful keeping up the quality for Pappy bottlings. Current Pappy does not include a single drop of Stitzel Weller juice and is hyped up much more then real S-W juice ever was.

        • Tadas A says:

          What was S-W/Old Fitzgerald distillery capacity? 1.8 million proof gallon capacity for the new Benson Pike distillery does not seem very large. For comparison, Old Wild Turkey distillery had capacity of 5 million proof gallon. New Wild Turkey Distillery has 11.5 million proof gallon capacity.

  4. ST says:

    In reading the WSJ article today on this news there was a link to Louisville Magazine about Pappy Van Winkle which I read also. It was good (as is the above) but it was noted that if your Bourbon is a little hot (higher proof) you could cut it with distilled water. I have a bottle of PVW 15 which I would like to soften up a bit. My question is what’s the ratio per say, each ounce of PVW- what portion of distilled water should you add?
    Thanks and I will look foward to sipping some Bourbon soon!

    • Lew Bryson says:

      Bit of a touchy subject, as I’m certain there will be those who urge you not to add any whatsoever! The only way to do it is to very gradually add a few drops at a time till you reach the dilution that works for you (and you may go too far the first time). But start small; it’s easy to add water to whiskey, but just ask the distillers, it’s not so easy to take it out!

  5. Danny Maguire says:

    Is there a danger of over production? That’s my concern with the Scotch Whisky industry with all the expansion there. Looks like Bourbon could be heading the same way.

  6. Richard Turner says:

    I’d be more excited if this were anybody except Diageo. However, they may surprise me….Hope… Hope… Hope…???
    Their history does NOT make me expect much.

  7. Richard Turner says:

    I’d say it was good news, if it was anybody except Diageo. When has the ‘Big D’ has done anything without some subterfuge lately?????
    If it was anybody else I’d be excited… or at least interested.

  8. JS says:

    Jobs, taxes and Bourbon…it’s a win, win, win!

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