Archive for the ‘Breaking news’ Category

Orphan Barrel Whiskey Release #4: Lost Prophet

Thursday, November 13th, 2014

john hansellI wrote about Diageo’s first three Orphan Barrel (OB) whiskeys here back in January. The whiskeys in these bottlings are from either the old or new Bernheim distilleries. As I noted in that post, they vary in taste, from the easy-drinking, gently sweet, and uncomplicated Barterhouse to the dry, spicy, and oak-driven Old Blowhard. Rhetoric, the third release, is somewhere in between those two flavor profiles, but leaning more towards Old Blowhard.

While all three releases are certainly interesting to taste and diverse in flavor profile, I feel that they never quite lived up to their potential. To me, the optimal whiskey is some blend of these three whiskeys, with Barterhouse being the primary component.

Orphan Barrel_Lost Prophet Bottle Shot_Lo ResProving that they have other arrows in the quiver, Diageo’s newest OB release, Lost Prophet, is not from one of the Bernheim distilleries, but is rather a 22 year old whiskey distilled in 1991 from what was then the George T. Stagg distillery (now Buffalo Trace) in Frankfort, KY. Similar to the previous OB releases, this whiskey spent time maturing in the old Stitzel-Weller warehouses in Louisville, KY (since 2006 for Lost Prophet), and was bottled in Tullahoma, TN, at the George Dickel distillery.

The mashbill for Lost Prophet is 75-78% corn, 7-10% barley, and 15% rye. Serious whiskey enthusiasts will note that this is similar to the “high rye” #2 mashbill formula at Buffalo Trace—the mashbill similar to such brands as Ancient Age, Elmer T. Lee, and Blanton’s. It’s bottled at 90.1 proof (45.05% ABV) and will list for about $120. Similar to Old Blowhard, this will be a one-time release.

Most importantly, how does it taste? I’m happy to report that it’s the best of the four Orphan Barrel whiskeys released to date. It’s complex, balanced, easy to drink, and not over-oaked. Sure, the spice notes (clove, cinnamon), oak grip, and notes of leather are there (it is a 22 year old whiskey, after all), but there’s also a lovely lower layer of sweeter notes (honeyed fruit, soft vanilla, coconut custard) for balance, along with a nice creamy texture. It’s a complete package.

This is a 22 year old whiskey. If you don’t like well-aged whiskeys, you might want to try it before you buy it. But, when compared to other 20+ year old bourbons in this age range (Pappy Van Winkle 23 yr. old, Elijah Craig 23 yr. old, Old Blowhard 26 yr. old, etc.), this whiskey has them beat. And at $120, it’s a better value.

Balcones Founder Chip Tate Speaks Freely

Sunday, October 19th, 2014

Author - Fred MinnickFor the first time since the August 8 temporary restraining order, Balcones founder Chip Tate can talk about the legal battle with his investors. He’s been under a strict media gag order, while the 170th Texas State District Court sorts out the disagreement between Tate and his investors, who alleged Tate refused to attend board meetings and even threatened to shoot board chairman Greg Allen. Allen’s legal team changed the terms of the temporary restraining order, Tate says, and he spoke with Whisky Advocate writer Fred Minnick.

By now, you’ve likely seen Allen’s side of the story. The Waco Tribune, bloggers and other media outlets published court records. We wrote about it here on the Whisky Advocate blog.

Last year, Balcones announced expansion plans for its Waco, Texas, distillery, making it one of the most-promising craft distilleries with award-winning whiskey. Allen and Tate seemed to be off to a great start and the press release offered incredible optimism with Tate saying he was “proud” to call Allen a partner.

But other things happened in a short span of time, and this is Tate’s side of that story.

Minnick: What is going on?

Tate: They were trying to make my life exceedingly difficult for a long while. Ever since I gave them a sense of what the distillery expansion was going to cost, I got a weird vibe from them. These are the investors who were going to fund the expansion. That was the whole premise. So, when I got that weird vibe, I put the figures together … {showing} cost between now and 2022, which is a lot. They’ve been strategically trying to get me out of the business since that moment. They’ve tried different proposals and board action to take over the company.

What did they do specifically?

{They were} trying to make me do daily reports on daily things and busywork. The board meetings were supposed to be quarterly, and this idea of having board meetings every few days is nonsense in itself and is clearly to make my job {difficult}. They said, ‘we need to get multiple signatures on checks and put new policies on travel.’ I asked: ‘Is there a problem with travel?’ This was draconian control based on no particular complaint. I proposed to diligently come up with a plan to meet their concerns. The {board} said, ‘nah. Voted. Seconded. Boom, boom.’ At this moment, they weren’t even going through the motions anymore.

Chip Tate

Chip Tate

But in July 2013, the investors come in and have majority control. Don’t they have final say in what goes on at Balcones?

No. When you do an LLC, you have an operating agreement on how you’re going to conduct business. Basically, there was some explicit language in there. They can’t do certain things without my consent. They can’t financially reorganize the company, which they were trying to force.

They said you threatened to shoot an investor.

The whole thing was absurd. When it came to August 5, Greg Allen stormed into the distillery very abruptly with two sheriffs. They said they would give me a period of time to buy them out. … When I got the written leave agreement, I was to resign presidential powers during a 60 day period and thereafter. When they couldn’t coerce me… they made up a bunch of allegations. They said I wouldn’t give them the passwords they literally took at gunpoint. They said I kept coming to the distillery. And they said I threatened to shoot Greg Allen. The funny thing is they said they had me on tape, and I said, ‘great!’ because I know what I said. What I actually said was in reference to when Greg busted into the distillery, I was talking to one of the other investors and said ‘I could have shot the guy, but instead I greeted him, was friendly and talked to him even though he had two armed sheriffs standing next to him.’ If you listen to the whole conversation, I told {the investor}: ‘you better do something about Greg here. They keep flying off the handle and going crazy, and I try to keep calming everybody down and react reasonably, and we don’t get anywhere. Rinse and repeat. But this can’t go anywhere good, and it can go somewhere bad.’

Do you have plans to sue them for slander or damage to your reputation?

One of the fun things about the American justice system: as long it’s done in court filings, you can’t get libel or slander. … with a few exceptions. I’ve been waiting for the circus to settle down. They released me from the injunction. They’re more envious to strike a deal than originally. Leading up to all of this was me saying, ‘hey, I don’t think you guys are happy. If that’s the case, one of us needs to leave the business before this gets to a bad place. I’d really like to stay. I founded it. If you are amendable, let’s talk about that.’ They turned down one offer after another.

What’s the end result here? Somebody buys them out? You get bought out?

If there’s a future, any future for Balcones, one of us is leaving. That’s for sure…. We {both} have to accept what we planned to happen isn’t happening. We’re not going to live happily ever after. We need to act like grown ups. And what we need to do is basically not pull each other’s shit out in the front yard, light it on fire and have the cops call—that’s not the productive way to handle this. {Using a divorce analogy…} What we need to figure out if I’m going to keep the house or they’re going to. The relationship is over. Let’s be grownups and focus on how we’re going to move forward. Either they’re going to buy me out and let me have my freedom. Or they get bought out.

How much to buy you out? And how much to buy them out?

I can’t really talk about that because we’re about to go in mediation.

The consensus from many lawyers on social media is for you to not fight this and to start fresh when the non-compete ends. Why have you decided to make this your life’s fight?

This isn’t my life’s fight. It’s been going on for two months. Anybody who thinks this is World War III has never started a craft distillery. This is a major skirmish approaching a war.

You’ve had an overwhelming amount of support from colleagues. Somebody even started a crowdsourcing site to raise money for your legal fees. What has that meant to you?

That’s huge. I can’t say how much I appreciate it! The support has kept me going. But still, even for legal reasons, I can’t really spill the beans, but these guys have a lot stuff they don’t want me to say. They misunderstood how carefully I handled them for the last six months. I am not going to lay down for these guys and let them steal from me.

The charge of contempt of court…

That was partially a reporting error. The judge makes final decision, {saying} I’m going to hold you in contempt, but I have some real questions on the restraining order.

Speaking of the restraining order, the temporary injunction is on hold now. What does that mean?

Basically, I’m not allowed to lie, cheat and steal or knowingly hold property that belongs to them. I can’t call up the employees and can’t go to the distillery. They have changed their tune very notably. They ran a full-court press on me and now that they’re done, I’ve said, ‘Is that the best you got?’ Because when I start talking, I want to make sure everybody is listening.

Are you confident you’re going to win?

Yes. If the law works the way it should, we would come to some sort of resolution. I just want to make whiskey again.

Canadian Club releases an all-rye-grain whisky

Monday, October 6th, 2014

Author - Davin de KergommeauxIt was a secret mission. So secret, in fact, that even the operative did not know what it was about. I could name the operative but that would put them at risk. Let’s just say, for the moment, it’s a whisky-loving writer based in a friendly country not that far away. It was mid-April and he flew from somewhere in that country to Louisville to meet Beam Suntory marketing director, Kelly McGregor. Louisville isn’t the easiest city to fly to and it took a full day of travel to get there, another on the return. All that for a single day in Louisville.

When Kelly met him for breakfast she couldn’t help cracking a smile as she told him that a blindfold would not be required for the journey. She identified the destination: the Jim Beam distillery campus on Happy Hollow Road in Clermont. Happy Hollow has a nice backwoods ring to it, but when they arrived at their destination – the product development lab – they were surrounded by the essence of modern science, right down to omnipresent white lab coats.

Canadian Club Rye in rye field“We’re going to taste some whisky,” she finally told him. “We’d like to get your impressions.” So, they toured the lab before he sat down with five scientists and about a dozen glasses of whisky. Some, he reports, were good, some were great, and one was just so-so. All had the rich spiciness, dried fruitiness, subtle sourness, and refreshing bitterness of rye.

They worked in silence, writing their tasting notes, five whiskies at a time, and then, once they’d committed their thoughts to paper, they discussed them one by one. Not which ones they liked or why, just aromas, flavors, and impressions. After a couple more rounds, someone collected all the notes, and just like that, it was over. He still hadn’t a clue what was really going on and he doubted that his hurriedly dashed-off notes would be decipherable, let alone of any value.

Then late in August this year, Rob Tucker, Beam Suntory’s senior brand manager, sent him an e-mail. “I wanted to let you know about our new product launch in Canadian whisky. I cannot reveal it yet, but will be letting you know sometime in September. We were honored that you were able to join our team in Kentucky, and hopefully you got a taste of what I consider to be our obsession with moving the Canadian whisky category forward. This new product, and in particular because it comes from this brand, will open the eyes of many Canadians about Canadian whisky.”

Great news, Rob, but there’s an important detail that’s missing: WHICH BRAND????

In Louisville, his taste buds had told him it was rye, and he knew that Rob was the mastermind behind Dark Horse, one of his favorites. So, when he received an invitation to attend a product launch for a new whisky from Canadian Club, one sentence jumped out at him: “Join us as CC unveils the newest member of its portfolio, honoring the grain that is exciting bartenders and whisky lovers across the country.”

Let’s join the dots: Beam Suntory owns Canadian Club. Bingo! He had it. A new all-rye Canadian Club.

Rob Tucker, Beam Suntory

Rob Tucker, Beam Suntory

It was an educated guess, though Rob still was evading his questions. Then a week or so before the launch, a messenger arrived from Beam Suntory with a bottle. He ripped the package open and lo and behold: Canadian Club Chairman’s Select 100% rye whisky.

Rob finally let him in on the secret. The whisky, he explained, is distilled and aged for 7 years at Alberta Distillers, Beam Suntory’s western Canadian distillery in Calgary and then shipped east to Walkerville, Ontario, for bottling at 40% abv.

Wait a minute! Before fans of “more-is-better” begin to snipe that the whisky is bottled at a standard 40%, take a look at the price. This seven-year-old 100%-rye-grain whisky sells for about $1.50 more than regular Canadian Club Premium. “We could have priced it higher,” Rob concedes, “but we wanted to get it into the hands of 25 to 30 year olds and price is sill an important factor for them.”

A note, then, to US residents who love their rye: Get ready for your cross border shopping run. With just 70,000 cases in the pipeline each year, this new whisky, at least for now, is available in Canada only.

Canadian Club Chairman’s Select 100% Rye was unveiled at a launch held at Toronto’s Spoke Club on October 2 and will be appearing in Canadian liquor stores over then next few months.

And finally, I can reveal the identity of this whisky-loving operative. It’s… Wait! I hear footsteps…

Whisky Auctions to Return to U.S. in 2015

Tuesday, September 23rd, 2014

Jonny McCormickSkinner, Inc., of Boston will host dedicated whisky and rare spirits sales commencing in 2015. Joe Hyman has been appointed to the position of fine spirits consultant to oversee this venture, which is likely to be welcomed by whisky collectors in North America. One impetus to expand into this area was Bonhams’ exit from the whisky auction scene in New York this summer, leaving an absence of any specific auctions for vintage spirits in the calendar.

I caught up with Hyman to mull over his time as head of whisky and rare spirits at Bonhams, NY, to talk about his new endeavor, and to discuss his perspectives on the auction prospects for different categories of collectible whiskies. Straight off, he corroborated the reasons given to Whisky Advocate by Bonhams that the auction house pulled out of whisky auctions in New York for failing to meet their own financial targets.

Why couldn’t they make it work? “It’s different in the States compared to Europe because of all the regulations around alcohol,” explains Hyman. “All the interstate commerce rules, licensing and warehousing issues…everything here has to be under bonded, secure warehouse space, which costs a lot of money. There’s such a layered system that each layer cannot step on any other layer’s toes, so to speak. You’ve got your distributors, your retailers, the auction houses, and shipping agents, so there’s a whole complex web to deal with, that most people in the auction business don’t want to bother with. The big places with huge wine sales, they’ll take whisky if you have $10,000 bottles, but they don’t want to have to deal with it otherwise. I can understand the viewpoint but it’s at a point where it’s growing. I did what I could.”

Joe Hyman

Joe Hyman

Meanwhile, auction houses in Europe have been courting American collectors to consign with them, making offers to ship their whisky collections overseas. Previously, some well-known shipping companies would only insure consignments up to a value of $1,000, inadequate for the needs of collectors consigning dozens of rare bottles, which left U.S. auction houses rather hamstrung.

Hyman has been striving to offer solutions. “I’ve made inroads with the shipping companies and international freight companies that deal with alcohol,” he said. “We can have collections shipped to us to our licensed warehouse, here in Massachusetts. We’ll continue to do the traditional live auctions with phone and online bidding, but we’ll also mix it up with online auctions like the European model.”

“That way, we can handle not only the really cool, expensive items that people get excited over, but we can help people who are looking for old-style whiskies for head to head tasting comparisons,” he explains. Connoisseurs will pay a premium for 10 to 18 year old whiskies from 10 years ago over the ones being produced today, because the flavor profile has changed or the availability of specific wood has altered.

“That environment can create more of a secondary market that the U.S. hasn’t had until now,” Hyman hopes. “Until a couple of years ago, it was eBay, Facebook, or Craigslist, but there is no real go-to place for the secondary market here. We can develop something like that. The $100 bottles and upward are ideal for the online auction environment.”

Skinner held a successful Fine Ales and Spirits online auction last April that included rye, bourbon, scotch, and Canadian whiskies. Furthermore, around 100 bottles of quality whisky are expected to comprise a section of their forthcoming wine sale this fall, before a full whisky sale next year.

What is his assessment of the market potential for whiskey, bourbon, and rye? “It’s going to continue to rise. People have continued to discover bourbon and rye over the past decade. The gains in recent auctions have been outstripping the pace of scotch. A lot of the old bottles are surfacing out of peoples’ basements, closets, and out of walls from the Prohibition era. We’ve not had the same turmoil and looting of basements that there was in Europe during the World Wars. Every time a bottle of significance comes up, then more people go searching through their basements and come up with things.”

What else is hot? “You’ve got the closed distilleries of Japan which have become the Golden Fleece of whisky collecting right now; the Karuizawas and the Hanyus,” he says excitedly. “People can’t get enough of that stuff right now, and it’s escalating. They’re going up at an astronomical rate.”

Canadian whisky has yet to have its moment in the sun as a collectible, but Hyman believes this will change. “People are starting to rediscover Canadian whisky, so that could be the next thing to go up,” he says. “I have bought Canadian whiskies like Canadian Club and Seagram’s VO at auction and they don’t go for anywhere near the same amount of money. I’ve taken these things to whisky events and people are amazed about how good they are.”

What about scotch then? “Even Macallan with their M has become a collectible whisky,” says Hyman. “It’s NAS, but it’s Macallan; not everyone can do this. Your collectibles of tomorrow will be the bottlings with age and vintage statements today. That stuff won’t be available in the future.”

Finally, looking back over your time at Bonhams, what was your proudest moment? “The Cognac 1762 Gautier was the stand out bottle for me, just because of the rarity of it. It was the highest price paid for a Cognac at auction outside of Asia.” Hyman is referring to Lot 947 of the April 30th 2014 sale where the Cognac sold for a hammer price of $50,000. I wonder, does he still dream of a bottle that he would love to auction one day? “Ardbeg distilled in 1815 maybe!” he says with a chuckle. “As a whisky enthusiast, I think a Springbank 1919 would be pretty exciting.”

The Skinner Fine Wine sale will be held on October 28th/29th 2014 at 6pm ET

The New Diageo Special Releases

Monday, September 15th, 2014

Author - Ian BuxtonOnce again it’s time for the annual Special Releases series from Diageo – everyone’s pantomime villain that the collectors love to hate (while secretly rushing to buy the bottles).

This year, Whisky Advocate was granted a sneak advance tasting. All eleven of the whiskies will be available in the U.S., albeit in limited quantities, so I have listed them all in the table together (see below) with the essential information on age, pricing (in UK Pounds; no U.S. pricing available as yet), % ABV, and the number of bottles to be released. (Incidentally, if you’re perplexed on the apparently odd numbers, you’ll find they all divide neatly by 6, thus indicating the total number of 6-bottle cases that will be shipped.)

What do we observe from the list? The usual favorites are there: Port Ellen, Rosebank, Brora, Caol Ila, and Lagavulin all make an appearance. But there are one or two surprises, including a first ever Special Releases’ bottling of Strathmill, and a venerable Singleton of Glendullan, at 38 years old the grand-daddy of this group.

The pricing, as we’ve come to expect, doesn’t offer any bargains nor, I suspect, make it likely that anyone will make a toss-the-cork session with these bottles, no matter how good their friends. Diageo have long-since understood the reality of the secondary market and determined that they, not speculators, will profit from the demand to own these treasures. One might recoil in mock horror at some of the prices but it’s hard to blame Diageo for this trend. Having said that, the Unpeated Caol Ila (£75) and the 12 years old Lagavulin (£80) are both accessible and attainable to all but the most impecunious of enthusiasts. These, thank goodness, are whiskies for drinking.

6 bottle range

As the market for this style dictates all the bottles save one carry an age declaration. The odd man out is the Clynelish Select Reserve. Though I understand the youngest spirit in the vatting to be 16 years old, this whisky is a complex, rich and mature blend created by Diageo’s Dr. Jim Beveridge and, for me, one of the stand-out drams of the collection. It’s a great testament to the argument, increasingly advanced by the distilling industry, that skilled blending counts for more than age on its own. While there are certainly some older whiskies in here, the result is a beguiling, waxy, mouth-coating set of sensations that mix Clynelish’s signature ozone and brine notes with fresh and dried fruits, smoke, fudge, and menthol. This is a whisky that keeps on giving – at £500 a bottle you might expect something sensational and this does deliver.

Brora bottle&boxIt’s far from the most expensive, however. Both the Brora and the Port Ellen releases will break the bank for most of us, requiring £1,200 for the Brora and £2,200 for the 14th Release from the closed and now legendary Islay distillery. But, putting price to one side as we must, those lucky enough to acquire a bottle of either are in for something of a treat: fans of these celebrated distilleries will find much to enjoy. Both need a modest amount of water to fully reveal themselves (but go carefully, as only a few drops are required); both are packed with subtle and complex smoke notes; both need time and some care; both finish long, with pepper and spice (an unexpected ginger edge in the Port Ellen stands out) and the damp, smoldering embers of a wood fire on a beach with salt on the wind call to mind their ancestral homes.

There’s poetry too to be found in the offering from Rosebank; this a bittersweet elegy for another lost distillery. Diageo’s Maureen Robinson perplexed us with her initial comment that the nose carried the scent of “fresh air”, but likened it to the crisp, clean aroma of freshly laundered cotton sheets (a 1,000 thread count sateen if I’m any judge of bed linen). This I thought was the aperitif whisky of the session, a vibrant, zesty palate-teaser that zinged into action from the very first sip. It was young, yet knowing; fresh, yet deep; sweet on the nose, yet by turns clean and drying.

From all parts of Scotland they have come and I surely must mention the Speysiders in the company: The Singleton of Glendullan; Cragganmore; a meaty, big-bodied, blustering Benrinnes that threatened to steal the show (and repelled in equal measure some of the panel) and the debutant Strathmill, initially coy and enigmatic but full of mesmerizing charm – a wallflower that would soon waltz elegantly past a line of eager suitors.

But the finish! Almost all these whiskies left me struggling for descriptors that capture their complexity, charm, and character. Too literal a description scarcely does them justice; too poetic and the reader will be baffled and think the taster bewitched…

So let me finish with the two Special Releases that will be most widely seen, enjoyed and drunk: the 15 years old unpeated Caol Ila and Lagavulin, bottled at what is for this distillery at least an unusual 12 years of age. The result of this policy of the preferment of youth is that there will be plenty to go around, at prices that permit enjoyment without the rueful contemplation of one’s credit card statement.

The freshness and vibrancy of eager youth was evident in both. A hint of smoke could be detected in the Caol Ila, which was soft, generous and giving and packed with vanilla, where the Lagavulin was all pulled pork BBQ with smoky bacon topping and a peat sauce. But then rich fruit notes emerged from the misty smoke, an autumnal note crept forward and a tentative, delicate, fugitive sweetness offered up its still, small voice.

If you are sufficiently fortunate to come into possession of one of these whiskies – any one of them – then do not hoard them; do not place them on some remote, unattainable pedestal; do not venerate them, but share them freely (yet with appropriate discretion). Induct some neophyte into whisky’s riches or exchange a dram with another privileged connoisseur.

‘Special’ these releases may be, but I implore you to set them free. It is noble work, and you will be the better for it!

DISTILLERY AGE AT BOTTLING YEAR DISTILLED UK RRSP % ABV NUMBER OF BOTTLES
THE SINGLETON OF GLENDULLAN 38 1975 £750 59.8% 3,756
CAOL ILA – UNPEATED 15 1998 £75 60.39% 10,668
CAOL ILA 30 1983 £425 55.1% 7,638
CLYNELISH SELECT RESERVE 1999 £500 54.9% 2,964
CRAGGANMORE 25 1988 £299 51.4% 3,372
LAGAVULIN 12 2002 £80 54.4% 31,428
PORT ELLEN 35 1978 £2,200 56.5% 2,964
ROSEBANK 21 1992 £300 55.3% 4,530
BENRINNES 21 1992 £240 56.9% 2,892
BRORA 35 1978 £1,200 48.6% 2,964
STRATHMILL 25 1988 £275 52.4% 2,700

More About Diageo’s Kentucky Distillery Plans

Tuesday, June 10th, 2014

Author - Fred MinnickDiageo still doesn’t have a name for its new Shelby County distillery, but the liquor giant somewhat revealed its American whiskey strategies at a public gathering at the Shelbyville Country Club on June 10.

Diageo officials said they’re investigating the possibilities of moving its Stitzel-Weller stills from Shively to the new location. These stills have not been used since the early 1990s, but produced some of the greatest bourbon ever made. Meanwhile, Diageo has tapped Vendome to build a 60-foot-tall column still, and Fluor Engineering to construct single story warehouses, which will be 27 feet tall and 55,000 square feet, with slight heat in the winter to keep the fire protection sprinklers from freezing. The heat will not influence aging, officials said.

The "Before" shot

The “Before” shot

The 300 acre, $115 million distillery will yield a projected 750,000 9-liter cases or 1.8-million proof gallons annually, but the officials were quick to point out that this volume is just an early estimate and the selected site—Benson Pike—offers growing room.

As for the upcoming master distiller, well, Tom Bulleit, founder of Bulleit Bourbon, had something to say about that. “It wouldn’t be me. I’m just the founder, just the business guy like Bill Samuels [of Maker’s Mark],” Bulleit said. “It will take two or three years just to get going. There will be a great national distiller here, a representative of Kentucky.”

Whether Diageo recruits a current master distiller from another company or pulls in George Dickel master distiller John Lunn (who has been known to be looking over Stitzel-Weller) remains to be seen. But all indications point toward this new facility being solely an American whiskey producer.

Diageo spokesperson Alix Dunn said the distillery will be used to make Bulleit and “innovative products in the pipeline.” It will most certainly not be used for distilling or aging George Dickel Tennessee Whiskey, Dunn said, adding “we can’t do that.” Diageo recently proposed a Tennessee whiskey law change that would allow the use of used barrels. Brown-Forman, the makers of Jack Daniel’s, said this was an effort to age George Dickel in Kentucky, among other things. Tennessee lawmakers said they will study the issue after the summer legislation ends. [UPDATE: the Tennessee legislature’s investigation into this matter ended abruptly last night after Lunn testified that the liquor stored in Kentucky would be blended with other spirits and not used for George Dickel.]

As for why Diageo chose to build a new distillery instead of repairing the historic Stitzel-Weller facility, Dunn said, “It made the most sense for the future to start fresh on a new site that allows for more options as needed.” It’s also worth pointing out that the closest residential area to the proposed single story warehouses is about one mile away with the surrounding areas zoned for agriculture. This puts the new facility at a significant distance from potential whiskey fungus litigants.

“We’re not right on top of other people,” Dunn said of the proximity of the distillery. “[Whiskey fungus] is not something we’re in agreement with, but it remains to be seen what the courts have to say about it.”

Tom Bulleit (left) talks with local folks at the meeting

Tom Bulleit (left) talks with local folks at the meeting

It also remains to be seen what the future holds for Bulleit. Diageo has not named the Shelby County distillery, though the founder tipped his hat to the fact he might be campaigning for it to become the Bulleit Distillery.

Bulleit bourbon has been one of the most important growth brands, especially in the cocktail culture, and owns the wells in core markets like San Francisco. Bulleit Bourbon sold 600,000 cases last year. Bulleit says his immediate goals for the brand is to roll out a private barrel selection program this fall at Stitzel-Weller, where Bulleit bourbon and rye are currently aged, as well as at two other locations. Neither he nor the other Diageo officials knew exactly how much Bulleit would be aged at the new location, saying there are many steps left to be taken.

The Diageo facility has received the support of the Kentucky governor as well as local and county politicians. A public hearing will be held on June 17 at 6:30 pm in Shelbyville.

At the June 10 gathering, during the first two hours, nobody opposed the distillery. In fact, most locals seemed incredibly enthused, including the Radcliff Farm owners who grow corn for one of Diageo’s competitors. (They didn’t say who.) “It’s going into a beautiful area, very peaceful,” said Jim Tafel, the farm owner. “They’ll have nice neighbors.”

Diageo Building a New Distillery in Kentucky

Thursday, 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.

Campari Buys Forty Creek

Wednesday, March 12th, 2014

Author - Davin de KergommeauxNews today that Italy’s Campari Group has bought Canada’s Forty Creek Distillery, should come as no surprise. After decades of marginal decline, Canadian whisky sales have rebounded strongly in recent years. Much of the credit for this must go to Forty Creek’s whisky maker, John K. Hall.

JohnHall_106It is more than a decade since Hall began taking his whisky from bar to bar in New Orleans and Texas. At the time Canadian retailers had shown little interest in the upstart Canadian whisky maker. As he pounded the pavement, selling a case here and a case there, Hall effectively became the face of Canadian whisky in the U.S. Happily, despite the sale of his distillery, this will continue.

From the firm base he began building in America, Hall returned to Canada to conquer his home market. Forty Creek is not the largest, but it is now the fastest-growing whisky brand in Canada. Today, Campari, which also owns Wild Turkey bourbon, confirmed Hall’s unshakable faith in Forty Creek by purchasing 100% of the distillery, its brands, and holdings for $185.6 million Canadian. Forty Creek, as the consultants say, was low-hanging fruit, ripe for the picking.

Campari was one of a number of firms that was interested in purchasing the distillery. Hall was looking for a buyer that would keep the Grimsby facility open and ensure that all the employees could keep their jobs. The deal was sealed when Campari committed to those objectives.

When I met Hall in Victoria this past January, he seemed tired. “I just can’t keep this up,” he said of the non-stop pace of appearances at whisky shows and liquor stores across Canada and the U.S. “I want to spend more time with my family. When I’m in my distillery now I spend half my time behind a computer.”

“You need to hire a CEO and get back to tending your stills,” I offered. And I guess, in a way, that is what he has done. Little will change in day-to-day operations at the distillery and Hall will remain as company chairman and whisky maker. With the full strength of Campari’s sales force supporting him, Hall will likely have more time to do what he loves best: make whisky.

“I am very excited about my 2014 Limited Release,” Hall told me recently. “It will be bottled in July, and then after two and a half months of bottle rest I’ll release it.” That’s typical John Hall. Ever the wine maker, he wants to be sure his whisky has time to recover from bottle shock.

Forty Creek is a small distillery. With two pots and one column still, it has yet to reach its annual production capacity of 555,000 cases of whisky, but with the Campari deal, that can’t be far off. Watch for expansion plans in the not-too-distant future as Campari uses its global resources to grow Forty Creek in Canada, and around the world.

Meanwhile, congratulations are due to Canada’s hardest-working and best-known whisky maker, John K. Hall, and the whole Forty Creek family. For that’s what it feels like when you visit the distillery.

Canadian Catches Up: Hiram Walker expansion planned

Thursday, March 6th, 2014

Author - Davin de KergommeauxAfter several years of very encouraging sales, managers at Canada’s largest distillery have decided to expand production capacity. In 2014, $8 million will be invested on new and upgraded facilities. The coldest winter in a century delayed construction, but the cement is now poured for a new tank house at Pernod-Ricard’s Hiram Walker and Sons distillery in Windsor, Ontario.

“The bottleneck here is the column stills,” master blender Don Livermore told me. “We can’t speed up the stills without affecting quality, so we are constructing a new building with four tanks to hold excess high wines. That will let us run the beer stills longer without getting backed up.”

Changes are coming in blending and bottling as well, where expansion will increase overall volumes while enabling smaller production runs. When your lines are geared to over 400 bottles a minute, it’s difficult to do small batches. New equipment in the bottling hall will permit a more leisurely pace, allowing it to process smaller runs. And good news for whisky lovers: capacity for short runs could lead to more new products making it into field-testing and onto your home bars.HIRAM WALKER & SONS LIMITED - Major Investment in Windsor, ON

“When you are set up for high production it’s difficult to attract business from small producers,” says Jason Leithead, who manages the bottling hall. “Right now a seemingly trivial change can be a monumental undertaking for us.”

Hiram Walker and Sons president Patrick O’Driscoll agrees: “The new production volume will smooth out the seasonal peaks to offer more stable employment and enhanced partnership opportunities for our customers.”

The expansion will boost overall bottling capacity by 230,000 cases. Hiram Walker currently employs about 400 people across Canada, 300 at the distillery.

“In my 18 years at Hiram Walker I’ve never seen it this busy,” Livermore tells me. “We were distilling about 20 million liters a year when I started. Last year we made the equivalent of 55 million liters of pure alcohol.” That translates into a lot of whisky. Key brands include Wiser’s, Canadian Club (made for Beam), and Gibson’s Finest (for Wm. Grant). Hiram Walker and Sons makes about 70% of all Canadian whisky, of which about 75% is sold to independent bottlers in Canada and abroad.

If Livermore has his way, this expansion is just the start of bigger things to come. “My long-term vision is to have an education center right here at the distillery. We make great products here and we need to tell people all about them.” That project is at least a decade down the road, says Livermore. For now, expanding capacity to keep up with demand and support growing consumer interest in small-batch high-end specialty whiskies is the top priority.

Mortlach: more news…and the price

Tuesday, March 4th, 2014

Author - Ian BuxtonDiageo have announced further details and pricing for the forthcoming release of four new Mortlach expressions. First revealed here in early December, the new range – which sadly means the demise of the much-loved Flora & Fauna 16 Years Old expression – comprises Rare Old (43.4%, no age statement); Special Strength (49%, non-age, non-chill filtered, Travel Retail exclusive); 18 Year Old and 25 Year Old (both 43.4%).

Rare Old

Rare and Old

Coming alongside a major expansion of the distillery, this is a big play for Diageo. Dr. Nick Morgan, the company’s head of whisky outreach, described the launch as “positioning Mortlach as the luxury malt to redefine the category. We didn’t just hang it with luxury trappings. It has great single malt credentials.” Quite what The Macallan will make of that remains to be seen but, as I warned last time, new Mortlach comes with a wealth warning; prices are very definitely going to rise sharply.

European consumers will get the new whiskies in smaller 500 ml bottles.  Morgan stated that this was “to make a little go further, as supply is constricted” but also suggested the new pack designs worked better in this bottle size. Be prepared for some fiscal easing: currently the Flora & Fauna bottle runs to around £70 in the UK (savvy merchants having moved their prices up as soon as supplies of these bottles were withdrawn).

Special Strength

Special Strength

The new ‘entry-level’ Rare & Old (it’s a NAS expression, but let’s not open that particular bottle here and now) in 500 ml is priced around £55 (£77 for the equivalent of a Euro-standard 700 ml bottle).  Special Strength will be £75 (£105); the 18 Years Old £180 (£252); and the 25 Years Old a thumping £600 (or £840 for a standard bottle).  U.S. consumers will get a 750 ml bottle, as the half-liter size is illegal there, so expect a shock at the check-out (actual U.S. prices have not been set yet).

The launch will be a global one, with priority given to high-end bars and specialist retailers in “core metro markets.” That means London, New York, Paris, Chicago, Shanghai, Moscow, San Francisco, and so on.

18 Year Old

18 Year Old

The highly distinctive packaging, said to be two years in development, was created by New York-based Laurent Hainaut of the Raison Pure design house, who claim on their website to offer “a platform for design excellence and social progress.” Clearly design excellence comes at a price, and with retail stickers such as these they will hardly be mistaken for socialists or philanthropists! The packs pay homage to the distillery’s founding father Alexander Cowie, and are heavily influenced by the great engineering achievements of Victorian Scotland, including icons such as the Forth Bridge and the mighty foundries and steelworks of Glasgow and the west of Scotland. (Note the metal framing on the 18 and 25 year old bottles.)

As for the distillery expansion itself, ground works have started to ready the site and construction will begin as soon as the final planning permissions have been received from the local authorities. It’s hoped that building will start very soon as the planning process is stated to be in its final stage.

25 Year Old

25 Year Old

The new Mortlach expressions themselves will enter global markets in late June and July this year, beginning with the UK and Germany, followed by Asia, and the U.S. later in the year. I await the launch with some interest: I cannot remember Diageo ever taking this amount of time and care to brief the whisky press over any previous release. These are big, meaty whiskies and the company is evidently playing for big steaks (pun intended, please forgive me!).