Archive for the ‘Whisky News’ Category

Bonhams, New York halts whisky auctions indefinitely

Monday, August 11th, 2014

Author - Johnnie McCormickWhere next for the whisky collector in America?

There will be no further Bonhams whisky auctions in New York for the foreseeable future. The auction house has canceled its planned sale for October 19th at its Madison Avenue galleries and will review the situation on scheduling further auctions next year.

Mariam Cebalo, director of business management at Bonhams confirmed to Whisky Advocate that the cessation of operations in this area was solely due to the whisky department’s profitability. In other words, the department may not have hit the targets set by the company to justify the resource required to appraise, catalog, store, display, and ultimately auction large consignments of rare whisky. Whisky auction houses must partner up with a retailer holding a liquor license, and that comes at a cost to the operation.

Therefore, this decision is not a reason to doubt the inherent value of whisky as a collectible or affect confidence in the secondary market. From the business perspective of an auction house, it is simply the commercial nature of whisky as a tradable commodity when compared with other assets in the New York saleroom. “The market is especially strong right now for Asian art, Californian and American paintings, jewelry, and motorcars,” Cebalo told me.

The Macallan M Hong Kong Auction

Whisky auctions continue overseas.

The legislation preventing whisky auctions in New York was overturned seven years ago. Christie’s held the first sale in December 2007 and Bonhams entered the fray in 2009. In recent years, Bonhams have been running biannual rare whisky and spirits auctions in Manhattan, with the last sale held on April 30th 2014.

Importantly, Bonhams have confirmed that the whisky department in Queen Street, Edinburgh and at One Pacific Place, Hong Kong are unaffected by this news and their full program of whisky sales continues as advertised. Bonhams have been expanding their operations in Asia-Pacific with the opening of a new Singapore office. This means that the highly anticipated Bonhams Hong Kong Japanese & Rare Whisky sale will take still place on August 15th 2014, and the next Edinburgh sale will occur on 1st October 2014. However, that may be little consolation for whisky collectors in the United States and Canada.

The Bonhams business is currently up for sale by its two majority owners, so would the reinstatement of whisky auctions be at the discretion of any potential new owners? Would there be any market conditions to be met first? “Bonhams’ evaluation of whisky auction scheduling for 2015 is based solely upon profitability,” said Mariam Cebalo. So if you are thinking of consigning your whisky or bourbon collection for sale, should you still approach Bonhams, New York, I wondered? Cebalo replied affirmatively, “With its international expertise, Bonhams is well equipped and happy to appraise large, valuable collections and discuss consignments with interested parties.”

Where does this leave the whisky collector in the United States? Bonhams were the only auction house running fully dedicated whisky sales in New York, so will other auction houses capitalize on this opportunity? As a collector, who else could you speak to? I took a straw poll of leading U.S. fine wine auction specialists and this is what they told me.

Acker Merrall & Condit

“We will continue to welcome and offer and sell whiskey at our auctions in New York,” said John Kapon, chief executive officer of the global company well known for its fine wine auctions. “I doubt we will conduct a ‘spirits only’ auction, as it is a niche market.”

Christies, New York

“Christie’s, NY led the way with spirits sales many years ago, in the first spirits auction since Prohibition,” remarked Charles Antin, Christie’s head of sale, associate vice president and fine wine specialist. “Since, we have always offered smaller, curated selections of scotch, bourbon, cognac, and rum in our fine wine auctions. On October 10th, in fact, we have a large selection of scotch including Black Bowmore and others.”

Hart David Hart Wine Co., Chicago

“We feel there is certainly potential to expand the fine and rare spirits segment of our business,” said Marc Smoler, their marketing manager. “Spirits categories such as bourbon, chartreuse, and Japanese whisky have drastically increased in popularity in the past few years. Hart Davis Hart has done particularly well with small production bourbons such as Pappy Van Winkle and older vintages of classic single malt scotches.

“As our business continues to grow, we would like to offer more opportunities to purchase and fine and rare spirits through both our retail and auction outlets and we welcome any collector to sell their whiskey collection with us,” he continued. “However, we don’t foresee a whiskey-only auction in our future.”

Morrell & Company, New York

I spoke with Jeremy W. Noye, Morrell’s CEO.“We’re always willing to look and consider a collector’s selection of whiskies or spirits.” However, he doesn’t see a dedicated whisky sale on the cards quite yet. “I won’t count it out, I won’t say never, but we will continue to have whisky within our fine wine sales. There is an interest in the market in vintage spirits looking at the distillation dates of different whiskies, bourbons and cognacs. In general, we don’t seem to see as much of the older bottlings here in the U.S. as you see in the UK and Europe. I know there are major collections here in the U.S. but they tend to hold on to them for longer than they do with wine.”

Admittedly, it is harder for a business that doesn’t handle large amounts of rare whisky to appraise and value whisky bottles. “It is labor intensive from our standpoint,” says Noye. “It does take a fair amount of research. My gut tells me there is less of a breadth of knowledge, the historical look and feel [of the bottles], and data out there as there is on wine at this time.”

“I think there is interest there,” he said encouragingly. “It is spread out across the country and globally. At least in the U.S., the Pappy Van Winkle craze has really spoken to that. We’ve seen more bourbon coming up to auction now, even the general release stuff. It’s the scarcity aspect.”

Skinner, Inc., Boston

After running a dedicated online auction of fine ales last spring, Marie Keep, director of fine wines said, “We see great potential for growing the exciting and dynamic marketplace of whisky and spirits, and believe we could become the auction house of choice for collectors on both the buying and selling side.”

Sotheby’s, New York

Sotheby have been known for their occasional spectacular sales of Macallan. Their press office said, “We don’t currently hold regular dedicated sales of whisky and there are no plans to do so. We don’t rule out offering occasional rare bottles or collections in the future though.”

Wally’s Auctions, New York

“Wally’s absolutely welcomes whisky collectors to sell their collections (and buy!)” enthused Julia Gilbert, Managing Director. “We have had great success with highly curated sections of spirits in our March and June 2014 live auctions in New York, and we frequently receive inquiries about offering spirits at auction. As the whisky market continues to grow both domestically and globally, a dedicated whisky or spirits auction is certainly in the realm of possibility for Wally’s Auctions in the future.”

 

Bonhams continues to be a major player in the secondary market for rare whisky, but this snapshot indicates that choice abounds, and the landscape may have changed in the U.S. by the time Bonhams are ready to come back into the marketplace.

Nomad: sherry maker González Byass ventures into whisky

Tuesday, July 15th, 2014

Alia AkkamThe other night I was sitting at a bar, a hushed, handsome space awash in wood and leather, tucked behind an unmarked door upstairs from a more raucous joint dominated by a flat screen blaring the World Cup and gals in too-tight dresses. I could have been in a speakeasy-style lair anywhere in the world, except I was in Taipei, at Alchemy, in the slick Xinyi district. It is here that I watched a large group of dolled-up friends, tipsy from a wedding, keep the party going by passing around a bottle of the Macallan and greedily sipping it like water.

Soft and sweet, the Macallan, I learned a few days prior, is the single malt of choice among Taiwanese imbibers. Instead of feeling fierce pride for the lovely whiskies being turned out at Kavalan, a little over an hour away from Taipei, many locals are skeptical of single malts from their homeland.

imageIt is precisely this status-conscious demographic González Byass is targeting with its brand new whisky, Nomad. The Spanish wine producer, best known for its range of sherries, has decided to amp up its spirits collection—most notably marked by the London No. 1 Gin—with Nomad, a whisky crafted by Whyte & Mackay’s zany Richard Paterson.

Like any Scotch whisky, this cross-cultural creation is distilled, blended, and aged in Scotland. But then, in a romantic twist, it’s shipped off to balmy Spain, where it’s finished in Pedro Ximénez casks. For the debut of Nomad, González Byass first set its sights on Taipei, the world’s sixth-largest single malt market. The Taiwanese, I am told, have the power to turn their drink-swilling neighbors in Hong Kong and China onto new products and habits, making them an even more captivating audience.

For Nomad’s grand launch, González Byass brought writers from around the world—luckily including myself—to Taipei to taste the much-buzzed whisky, discover what makes it stand out from the bombardment of new releases on retail shelves, and give them a feel for Taiwanese nightlife in between dumpling runs.

Via Skype, Paterson, donning a suit in the middle of the night, UK time, walked curious attendees through the particulars of Nomad. For example, he told us he melded 25 single malt and six grain whiskies that are 5 to 8 years old for this blend, then aged it in oloroso casks for a year. Once shipped off to Spain, the whisky did time in the Pedro Ximénez barrels for up to another year. Although most bottles of booze boast 40 or 43% ABV, Paterson determined Nomad’s should be 41.3%.

I was almost scared to taste it. After all this anticipation, imagine what a letdown it would be to fly across the globe for a swig of something hot and one-dimensional. But it did not disappoint. Paterson kept emphasizing its heady raisin and marzipan notes, and the pastry buff in me was delighted each rich sip conjured a loaf of warm Christmastime Stollen and brown sugar-packed sticky toffee pudding.

He also encouraged us to resist the urge to plunk ice cubes into our glasses, and drink Nomad neat. This will not be a problem because it’s an approachable whisky, something I would have no qualms about opening on a Tuesday night while in yoga pants. At around $45, it’s not something you need to save for a white tablecloth feast, but guests will most certainly relish it when you bring it over for a potluck. They may even strike a conversation over how closely the flat, flask-like bottle resembles Knob Creek’s.

Perhaps the most interesting element of Nomad’s arrival is that it has given González Byass the opportunity to carve out a new category of whisky called Outland. The name exemplifies wanderlust and adventure, and it’s interesting to think of the future cross-cultural collaborations that will undoubtedly ensue. More whiskies making their way to Spain is inevitable— González Byass may have the audacity to take Scotland-meets-Spain whisky to a new level, but Paterson is no stranger to such international tinkering; he did this before with Sheep Dip—yet is Irish whiskey aged in Kentucky a possibility? Or maybe Japanese whisky will get sent off to Canada?

Lest bartenders be excluded from all of this intrigue surrounding Nomad, the González Byass folks asked local barkeeps to show off how they weave the whisky into clever concoctions. One of them even found Fireball a fine complement. With Paterson’s words warning us to drink it in as pure a state as possible, I only wanted to try it in an Old-Fashioned. Surely Nomad will make a splash on Taipei’s burgeoning craft bar scene—and New York’s when it hopefully hits the States in the fall. Dessert notes coupled with a European fairytale of a narrative might just get Taipei bar-goers to look beyond their beloved Macallan.

Five new releases — no, make that six!

Friday, July 11th, 2014

Author - Ian BuxtonTruly the whisky gods have smiled on me. Great are their blessings, as I bring you tidings of five (yes, five: read it and weep) interesting new releases that I have tasted recently on your behalf. To be even-handed, I’ll mention them in alphabetical order.

First up, then, is the Balvenie Single Cask 15 Years Old expression, the second in Balvenie’s Single Cask line. Drawn from a sherry butt, cask number 16293 (not that any of us would know the difference, but it lends corroborative detail to the label), this full-flavored 47.8% dram drew me in with its rich, warming color, and then engaged my palate with an explosion of spices and sweet dark fruits (think candied pineapple and chocolate coated raisins) that lingered gently for minutes afterwards.

With a mere 650 bottles available worldwide, and a comparatively modest $99.99 price point, I don’t expect supplies will last long, but a further Single Barrel release, drawn from a refill American oak barrel and aged 25 years, will complete the range at the end of 2014. These Single Cask releases are another sublime illustration of the hand of a master; in this case, Balvenie’s malt master David Stewart. Grab one while you have the chance.

Glenfiddich ExcellenceStraight on to another from the William Grant & Sons’ stable, this time Glenfiddich Excellence, a 26 year old from the world’s best-selling single malt brand that, a trifle worryingly, they described as a “luxury expression” (worryingly, because that’s generally bad news for wallets). All too often, such language from the PR folks speaks more to ritzy packaging than the quality of the liquid.

This is the first time Glenfiddich have released a whisky wholly and exclusively matured in bourbon casks. It struck me as a curiously subtle whisky, strangely pale for its age, and one that will slowly seduce you with its evolving complexity rather than make an immediately dramatic entrance. It’s none the worse for that, but I imagine buyers will need to take some time to fully get to know and explore its undoubted depths. (43%, around $600).

GG Wine Cask MaturedMy third selection is from a distillery as obscure as Glenfiddich is well-known: Glen Garioch. Part of the Morrison Bowmore stable, it tends to be over-shadowed by its more famous Islay cousin. I rather fancy that if it was in Speyside it would enjoy greater fame and appreciation but, as it is, somewhat tucked away in rural Aberdeenshire with no near-neighbors, it languishes in obscurity as a result, with much of the output historically going into blends.

That’s a shame, but perhaps this latest release will win it a few fans. This is the Glen Garioch 1998 Wine Cask Matured which (the hint’s in the name) has spent the last 15 years aging in the finest ‘tonneaux de vin rouge’ (that’s red wine casks to you and me) from an anonymous Bordeaux chateau; annoyingly, they couldn’t or wouldn’t tell me which one. Never mind; while plenty remains of the distillery’s fruity and spicy Highland character, the casks have added loads more intriguing flavors: berries, chocolate, ginger, and coconut to name just a few that rolled over my palate. Bottled at 48% abv, the 5,400 bottles available will be shared between the UK, the U.S., and, fittingly, France. Look for them this Fall at around $170.

Next up is the only blended whisky of the five, but a notable one. This is John Walker & Sons Private Collection, the first in a series of limited releases from this Diageo behemoth. While the Johnnie Walker brand is huge, the folks behind it have also cleverly managed to introduce some variety with the Private Collection and, if this new release is anything to go by, there’s every chance they will even please single malt mavens. This is an exquisite blend specially prepared to highlight different facets of the brand’s character: master blender Dr. Jim Beveridge has showcased the smoky Highland and Island single malts in the blend, but introduced a delightful sweet note into the bargain.

Just 8,888 bottles will be available worldwide, and while that number might suggest Diageo have their sights set firmly to Far Eastern markets, their spokesman assured me that the U.S. will be their most important market. This isn’t a cheap whisky by any stretch of the imagination—expect a retail price of $750+—but unusually for products with this premium position, the packaging is relatively restrained, letting the whisky do the talking. As, in my view, it should.

Beveridge drew on some rare experimental casks for the blend and gave the whiskies a long marrying period to integrate their complex flavors. No age has been declared, as is the current fashion, but there are some very mature whiskies to be found in the blend, which will never be reproduced, so scarce are the constituents.

And, finally, back to William Grant & Sons (haven’t they been busy?) for a very rare and special release of their little-known Kininvie single malt, from a distillery opened in July 1990 essentially to supply the blenders. If you’ve ever visited their distilling complex at Dufftown, Kininvie is housed in the anonymous building behind the Balvenie tun room. If you didn’t know it was there, you probably wouldn’t have noticed it, and the guides don’t generally point it out.

They are offering two expressions, at 17 and 23 years old respectively, both with an identical cask mix (80% hogsheads and 20% American oak sherry; both at 42.6% abv). The younger whisky is reserved for travel retail, but the older version will appear in whisky specialist shops in domestic markets. With very limited quantities released and a price point of over $300 for a bottle equivalent (sold only in half bottle sizes), Kininvie is never going to be an everyday drinking whisky.

No doubt single malt enthusiasts will welcome the overdue arrival of this rarity, though, and will be interested to try what Kevin Abrook, Grants’ global whisky specialist for innovation, described to me as a hitherto “hidden secret jewel.” I found lots of vanilla sweetness, floral, citrus, and cut grass notes in my dram, finishing with a suggestion of fragrant sweet lemon mint.

STOP PRESS: As I file this report, Highland Park have sent me their new Dark Origins release. The whisky gods really are working overtime.

Mossburn And Mathieson: a different distillery startup story

Friday, June 27th, 2014

Author - Gavin SmithAnother day, and another Scotch distillery project appears. No doubt funding will come from an issue of founders’ bonds or future cask sales, and a diverse group of private investors, while early income will be predicated on sales of gin and new-make spirit. You get the picture.

So we look at the case of Mossburn Distillers Ltd. with a slightly seen-it-all-before eye. We chat with chief executive Neil Mathieson, who outlines two distillery projects, one on the Isle of Skye and another near Jedburgh, in the Scottish Borders. Talk turns to likely expenditure; and Mathieson mentions that the Borders plans involve spending between £35 and £40 million ($60 to $68 million), and that no external funding will be required.

Did he say £35 to £40 million? More or less what it cost Diageo to build its largest and most state-of-the-art distillery to date at Roseisle? Yes, he did.

Clearly we need to know more about the man and his plans. Mathieson was born in Scotland into a family with over 100 years of involvement with Scotch whisky. Moving to London, he trained as a chef, also getting involved in law, accountancy, and hotel management. He then opened a restaurant with his chef wife.

For the past 30 years he has been running Eaux de Vie, which he set up in 1984, growing it into the UK’s leading independent importer of spirits. Eaux de Vie now in the hands of Marussia Beverages BV, which ultimately belongs to the privately owned Swedish investment company Haydn Holding AB. Marussia operates vineyards in Europe and a brandy distillery in Eastern Europe, while additionally working with Caribbean rum producers.

Neil Mathieson points out that, “We started looking at having our own involvement in whisky distilling in Scotland five years ago, so we’re not jumping on a bandwagon.” In order to further these distilling ambitions, Mossburn Distillers Ltd. has been set up to create and operate the two new distilleries.

Proposed designs

Proposed designs

“At Torabhaig on the southeast coast of Skye, more than £5 million ($8 million) will be spent building a new malt distillery in a listed farm steading,” notes Mathieson. “The aim is to produce half a million liters of spirit, using traditional pot stills made for us by Forsyths. The restoration of the buildings has commenced and the first distillates will be produced in 2016. We expect that the flavor profile will be confirmed over the next year as we work on the still shape and height, malt sourcing, and wood program.”

By coincidence, distilling guru and former Diageo production director Alan Rutherford already had an existing interest in both the Jedburgh and Skye distillery projects. He was involved with the Torabhaig distillery venture before Mossburn came along, when all permissions were in place ready for work to commence. At an earlier stage Rutherford had identified the Jedburgh site as an ideal location for whisky-making in the Borders. Joining forces with the Mossburn team as technical director, it was decided that both ventures should go ahead.

“At Mossburn, our aim is to produce up to 2.5 million liters of malt and grain spirit per year,” says Neil Mathieson. “The design of the distillery buildings is currently subject to gaining planning permission, although work has begun on the other buildings at the site we own, based around the former Jedforest Hotel. We hope to start on the production buildings next year with distillation commencing in 2017. As with Torabhaig, we have yet to confirm the flavor profiles for production.

“It’s going to be a unique, statement building, which will incorporate a malt plant, a grain plant and a ‘hybrid’ plant; three distilleries under one roof, in effect. Ultimately, there will also be maturation facilities, a bottling hall and 1,000 square meters of hospitality space. We aim to have the largest whisky shop in Scotland and conference space for a spirits academy. If all goes to plan, we are talking about a 2015 build, while in 2016 the equipment will be put in place, and during 2017 the distillery and visitor center will open.”

Given that both distillery ventures are being “internally” funded by a clearly cash-rich enterprise, there are fewer pressures to obtain short-term returns for Mossburn Distillers Ltd than in the case of other fledgling whisky distillers. “We are working on a 25-year fully-funded business plan, just as we would for our other vineyard and distillery enterprises,” explains Mathieson.

Torabhaig plans

Torabhaig plans

“There will be no founders’ casks or sales of new-make spirit. We will market single malt, single grain, and blends, and the aim will be to build brands and create international sales prospects. The first limited release bottlings will probably be of five year old whisky before a standard ten or twelve is chosen. This will depend on the flavor profile the team decides on, and the development over the first five years.”

Some observers of the Scotch whisky scene foresee problems when all of the emergent ‘craft’ distilling operations begin fighting for their slice of the market. After all, each is likely to be offering consumers pretty much the same product, namely three of four year old, ‘limited edition’ bottlings from a predictable variety of casks, all with price tags of $120 and upward.

It appears that Mossburn is in the position to avoid such a situation, but what does Mathieson suggest for others embarking on their whisky-making dream? “I would advise them to concentrate on the costs of grain, wood, and cask storage over their aging plan, rather than the initial outlay on distilling equipment, and not to consider unrealistic retail prices or expect them to continue increasing,” he says. “Also, forget the U.S., as our distribution and retail models are different. Perhaps if we all took the initial expected financial requirement, doubled it, and then doubled it again, we would all be securely funded for the future!”

 

Some residents plan to fight new Diageo distillery in Kentucky

Thursday, June 19th, 2014

Author - Fred MinnickDespite the Shelby County planning commission unanimously approving the $115 million Diageo Distillery, nearby residents plan to continue protesting if several local issues are not addressed.

Diageo officials explained their company’s distillery plans, including state-of-the-art fire protection measures, significant economic benefits, and environmental considerations that include the planting of 2,450 native trees and a bio retention basin. But at the June 17 public hearing, several citizens offered cynicism toward Diageo’s claims and raised several issues over odor, traffic, noise pollution, water usage, black fungus, and sewage.

At the center of the community’s issue is the Guist Creek Lake, a 317-acre reservoir five miles east of Shelbyville. Diageo plans to use 180,000 gallons a day from the lake and says feasibility studies indicated this will not impact local water supplies.

But Bill Roberts, a 25-year resident of the Guist Creek Lake area, says past droughts have impacted its usage. “I can remember twice the lake was so low Shelby County had to keep the farmers from pumping water for their crops,” Roberts said. “How can [the county] allow another company to take 180,000 gallons a day from that lake and use it?”

The water commission determined the distillery’s lake usage would take out less than two inches of level, said Guy. L. Smith, executive vice president for the company, who was the lead Diageo presenter at the hearing. “If there was a drought, we’d be a part of the community that would be sensitive to that and would not just carry on,” Smith said.

There’s also the issue of the lake residents tapping into the new infrastructure.

“For 25 years they’ve been telling us we’re going to get sewers and fire hydrants,” said Linda Casey Stevenson, a resident who lives two blocks from the proposed distillery entrance on Benson Pike. “Diageo is coming in and they’re building all this. But we will not be allowed to hook into that. Obviously, they have declared Shelby County is open and for sale.”

Linda Casey Stevenson is concerned about drought.

Resident Linda Casey Stevenson is concerned about drought.

Stevenson says she’ll continue to voice her opinions.

But there’s little that can be done. Smith says Diageo plans to be breaking ground in three months and wants to support the community as “good neighbors.” Diageo is now pursuing approvals for building permits, but it’s met all county and state requirements to begin the project, Smith says.

In addition to the area’s tree plantings, the company says it went above and beyond the county’s newly adopted zoning requirements for a distillery, which required at least 25 percent of the property to be dedicated to agricultural use or preserved as a conservation area.

Diageo said it will have a zero waste to landfill and that at least 100 acres will serve as a natural barrier to the operation. Diageo also explained buildings will fit in the natural landscape and will contain fire as well as alcohol leaks.

Company officials said in the case of a fire or massive barrel leaks, the warehouse’s concrete dikes would contain the fire or liquid. The water retention basin would act as a secondary containment area, they said.

“The entire area of disturbance in the distillery area and warehouses is drained to the water bio retention basin,” said Kevin Young, a site planner working with Diageo. “All storm water goes through a filtration system before it exits the site. This is not required by [the zoning], but something we’re doing above [requirements].”

These extra efforts have not gone unnoticed. Outside of the Guist Creek Lake residents, Shelby County Tourism and residents expressed support for the new distillery.

“I appreciate the dilemma of [residents] and their concerns. However, this distillery has gone above and beyond what most companies try to do within our regulations and to support this community,” said Shelby County resident Katy Shabdue. “I’m very much in favor of this.”

Only one resident claimed to have an issue with the whiskey fungus. The young man presented the commission with a picture of black mold. The commission did not address him and later voted in favor of the distillery.

Construction is expected to be completed within three years, Diageo says. The company still has not named the distillery.

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.”

Whiskey Shortages? Not at Beam (Suntory)

Friday, June 6th, 2014

Author - Fred MinnickWhy did the world suddenly start to care about the whiskey shortages?

On May 8, Buffalo Trace sent a media-wide press release that detailed looming bourbon shortages. From there, serious journalists covered these tragic circumstances and whiskey shortage stories became a trendy subject on slow news days. So, if you’ve been wondering where all these stories came from, now you know.

With that said, the shortage is real, to some extent. The industry is feeling heavy demand with no end in sight.

But the world’s largest bourbon maker, Jim Beam, has been relatively quiet in these doom-and-gloom whiskey stories. There’s good reason. Suntory purchased the company in January, and it’s been quietly adding to its Kentucky distilleries, had the acquisition pass through regulatory bodies, and developed a new Beam-Suntory logo that offers a subtle contrast in American creativity and Japanese efficiency.

BeamSuntoryLogoJust how is Beam doing in this whiskey shortage? According to Clarkson Hine, Beam-Suntory’s senior vice president of corporate communications and public affairs, Beam was ready for the demand.

“We have been investing substantially over the past several years to increase our bourbon capacity, including the recently announced third still at Maker’s Mark and construction of new rackhouses,” Hine says. “Given the laydown decisions made years ago, we currently have supplies across our bourbon brands to support consistent healthy growth.”

But not all bourbons are created equal. According to Beam’s financial 2013 results, Maker’s Mark grew 17% and Knob Creek 14%, while Jim Beam paced at 4% growth and Basil Hayden’s threw a party with 29% growth.

Hine says Australia’s market softness impacted Jim Beam’s growth rate and the company’s marketing strategy for Basil Hayden’s led to consumers discovering the 80-proof whiskey for the first time.

BH750_06“We made a strategic decision last year to boost investment behind Basil Hayden’s, particularly in the on-premise and in social media,” Hine says. “We believe the brand has the potential to be the next break-out star from the Small Batch Collection, building on the ongoing success of Knob Creek.”

Basil Hayden’s is certainly poised to capture the beginner’s market. People tend to find this lower-proof bourbon to be subtle and with a couple ice cubes, it offers the newbie little to no bite. In social media, the bourbon appears in photos set in places of relaxation, from a park bench to a bathtub, appealing to one’s inner tranquility, a refreshing attempt at presenting to new consumers.

Meanwhile, Beam-Suntory finds its new company in change. Starting July 1, Hine says, the company begins to transition distribution for the legacy Suntory brands into the old Beam routes to market in the U.S. and Germany.

“We expect that management of Suntory’s international spirits business outside of Japan will integrate into Beam Suntory in stages by the fourth quarter, with the Japan business to merge into Beam Suntory by the end of 2014,” Hine says. “Given the size and importance of the Japan business, Japan will become Beam Suntory’s fourth operating region.”

As for the American whiskey, well, Beam Suntory seems to be business as usual. Expect to see two new editions in the Jim Beam Signature Craft Harvest Bourbon collection this fall; one will add brown rice to the mashbill in place of rye, the other will replace rye with red winter wheat. Meanwhile, the trucks keep moving in and out of the Clermont and Boston, Kentucky, facilities with tankers of whiskey and barrels to stack. Beam seems to be perfectly under control.

The reason I tell you this: the next time you hear your buddy talk about the whiskey shortage, you can tell them to calm down. If Jim Beam—excuse me, if Beam Suntory runs out of whiskey, then it’s time to panic.

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.

A First Glimpse of the new Ardnamurchan Distillery

Friday, May 23rd, 2014

There is an undulating, skinny ribbon of asphalt running along the north shore of Loch Sunart. It’s barely wide enough for one vehicle, let alone two, but it stretches all the way out tJonny McCormicko the most westerly point in mainland Great Britain. In this stunning locale, distilling is set to commence at the brand new Ardnamurchan Distillery in Glenbeg, Lochaber. The independent bottlers Adelphi Distilling Ltd will finally see their dream realized and join the rank of those who can proudly call themselves distillers. This is no farm distillery by any stretch of the imagination. Underneath the twin pagodas, the Ardnamurchan Distillery will have the capacity to make 500,000 liters of alcohol per year.

Graeme Bowie

Distillery manager Graeme Bowie gave me a tour of the site. He was assistant manager at Balblair Distillery for six years, and has progressed his way to distillery manager from distillery operator following six years at Balmenach and sixteen years at Glen Grant. As you might imagine, he is relishing the job at hand.

The distillery will produce peated and unpeated Ardnamurchan whisky in equal quantities, although at the outset, Graeme predicts it could be eight years until the company considers the whisky to be ready for release. Boldly, there will be no gin or other distractions produced for short-term cash. They are straightforward whisky men; nothing more, nothing less. Meanwhile, there will be a visitors center with a bar and tasting area where you will be able to find Adelphi’s latest independent cask strength bottlings.

The company is named after the Adelphi distillery, a Lowland distillery that operated on the south side of the River Clyde in Glasgow from 1826 until 1907, drawing its water from Loch Katrine. In its day, it had two mash tuns, up to twelve washbacks, and two stillhouses containing a Coffey still and four pot stills. In addition, the 19th century Adelphi distillery boasted its own cooperage and maltings (though the bulk of the malt came from Port Dundas). When Alfred Barnard paid a visit in the 1880s, Archibald Walker & Co, then Adelphi’s proprietors, owned Limerick Distillery, Ireland and the Vauxhall Distillery in Liverpool, England. The Adelphi name was revived in 1993 by Archibald Walker’s great grandson.

Like other newly opened distilleries, Ardnamurchan will have a private cask ownership scheme whereby whisky enthusiasts and clubs can order a cask of peated or unpeated spirit filled into either a bourbon barrel or sherry butt. Final prices are being confirmed, but they are expected to be approximately £1,750 for the bourbon barrel and £5,000 for the sherry butt, so it should prove popular.

Inside the biomass burner

Graeme pointed out their four 15,000 ton grain silos, which will receive the barley deliveries. With different malt specifications, supplies will come from Bairds Malt, and from malting on site. Production will begin with milling in the compact Alan Ruddock AR2000 four roller mill, the same model as you will find at Wolfburn distillery. Adelphi have installed a two-ton, copper-topped, semi-lauter mashtun with a manhole and double hatch. Power will come from the Swiss-built, one megawatt Schmid biomass wood chip burner, whose fiery hunger will be fueled by the local forestry companies. The yawning hatch to the deep pit of the chip store in the yard is motor-driven and opens effortlessly at the touch of button, like the malevolent plaything of a Bond villain. The burner can take up to an hour to get up to its running temperature of 800°C, but then it will reliably produce steam bountifully. This is conveyed to the space age looking Steam Accumulator.

Ardnamurchan’s pagodas

Each heating tank holds 9,000 liters of water in preparation for mashing. The first water will be 6,500 liters at 65°C, followed by a second water of 4,000 liters which will slosh in at 82°C. The 6,500 liters of the third water will gush in at 90°C. Production will start modestly at one or two mashes per week, but in time, production will be ramped up to six days a week.

Unique to Scotland, the fermentation will be carried out in four oak washbacks resized from ex-cognac vats by the J. Dias cooperage in Paramos, Portugal, plus three Forsyth-built, stainless steel washbacks complete with switchers. Anchor dried yeast will be used (10 kg for every 10,000 liters). The fermentation times are planned to be reassuringly long to build flavor, envisaged to be 55 hours for the short runs, then 88-90 hours for long runs over the weekend.

The pair of virgin copper stills look magnificent. Built by the experienced coppersmiths of Forsyths, they sit resplendent behind picture windows. The wash still holds 10,000 liters and has a silhouette reminiscent of those at Highland Park. Meanwhile, the spirit still has a body contoured like the Glen Grant stills, and has a capacity of 6,000 liters. Everything is controlled by hand, so you will find no automation here. The vapors will funnel down a Lyne arm sloping away at 15° into two shell and tube condensers tucked away at the back, before the spirit is pumped into the spirit receiver warehouse vat.

McCormick Ardnamurchan distillery stillThe first delivery of American oak barrels has already arrived from Jack Daniel. Ardnamurchan’s traditional dunnage warehouse will bear casks three racks high, but it is eerily empty at the moment. The steel frame of the warehouse is covered with Kingspan; insulated, metallic panels to help keep a cool, damp interior temperature for maturation. Eventually, the warehouse will hold 6,500 casks over two floors but it will take six years to fill up before they need to build another one.

The warehouse footprint has been physically hewn out of the solid rock of the hillside, some 12 meters deep. The excavated rock has been utilized to lay a rough road up to the distillery’s water source. Before I depart, Graeme zooms me a mile up the bumpy track in an all terrain vehicle to show me the source of the production water from the Glenmore River.

As the inaugural distillation is still a few weeks away, the only undertaking I’m denied today is a taste of the new make Ardnamurchan spirit. However, that intrigue gives me the perfect excuse to return.

Four Kings Collaboration Whiskey

Wednesday, April 23rd, 2014

Collaboration beers are common in craft brewing. Brewers come and play in each other’s house, and make something they maybe both wanted to try but haven’t, or add some house specialty from one brewery to the house specialty of another. You don’t see a lot of it in spirits, though. Whether it’s the long lead time, or the hefty tax load, or just…well, that they’ve never done it before, it’s a rare spirit that sees more than one maker.

Author - Lew BrysonFour Midwest distillers have stepped up to get the ball rolling. Corsair Distillery in Nashville, Few Spirits in Evanston, Illinois, Journeyman Distilling in Three Oaks, Michigan, and Mississippi River Distilling in LeClaire, Iowa each contributed 30 gallons of whiskey that was blended into what is being called Four Kings Bourbon, for the four distillers, and the four grains that went into the whiskey.

“It was a crazy idea we had over drinks last spring in Chicago,” said Bill Welter, owner/distiller at Journeyman.  “As craft distillers, we spend a lot of time at the same events and get to know each other.” It was just an idea until Burchett mentioned it to Brett Pontoni, the spirits buyer at Binny’s of Chicago. Pontoni loved the idea, and got on the phone to get the four distillers’ wholesalers to agree to work together on the deal. They went for it, and Binny’s wound up as the sole off-premise retailer for the run of 600 bottles.

Four Kings

Four Kings

It’s not just four different distillers. “We all threw in bourbon except Corsair,” noted Mississippi River’s Ryan Burchett. “They brought fifteen gallons of bourbon and fifteen gallons of smoked wheat whiskey.” You’d expect nothing less from Corsair, but why wheat whiskey?

“We tasted through a lot of whiskies looking for something that might add a unique twist to the product,” said Andrew Webber, president and distiller at Corsair. “Wheat is so light and sweet, but the smoke gives it another dimension. In the blend, it gives the whiskey a sweet kiss of light smoke on the finish that I think people are really going to like.”

“We were able to sample the blend before it went back into barrels for finishing,” said Few Spirits owner and distiller Paul Hletko. “The really striking thing to me was just how clean and smooth it was. We have four great distilleries doing it right.”

The whiskey is being released during Whisky Week in Chicago, this Thursday, the 24th. You can buy it at Binny’s, and it will be pouring at Delilah’s on the night of the launch. Other than that…you’ll have to ask the Four Kings.