Distillery Question

[Blue]

An issue was raised on another forum about the number of new brands being created at existing distilleries but that no new distilleries are being added. I am curious as to why no one is opening new facilities and what the upper practical limit on existing distilleries actually is. At a certain point the existing producers just won't be able to produce any more quality product.

Just opening the topic for learned discussion so please feel free to take it where you will.

[gillmang]

I am not sure what the business case is. Distilling is a capital intensive business. Returns are years down the road (therefore uncertain, considering how demand can change in this business) unless the new whiskey is sold to people who will age it. I don't think that part of the business (if it still exists) is of interest to prospective distillers, since there is overcapacity in the industry now from what I understand (e.g. I believe at Buffalo Trace) so demand of that type could likely be sourced more cheaply than a new producer could sell for. Yet, there may be the potential to build a brand for people who have the money and time to wait. The Kulsveens are re-establishing distilling at the old Willett's plant, a welcome development in bourbon manufacture. A number of craft distillers on the west coast might branch into bourbon. So some intrepid persons will likely constitute competition for the existing makers but the prospect of a large new entrant in bourbon distilling seems unlikely to me. The Kulsveens are partly an exception in that they are not completely new entrants, they know whiskey very well and have been selling bourbon for years made for them by Heaven Hill and maybe other companies, so their segue into distilling proper makes good sense. The family used to distill years ago, too, clearly it is in their blood. Possibly Julian considered doing that but elected to do a joint venture with Buffalo Trace and have the product custom-made for him (kind of like contract brewing in the beer business). Many contract brewers have done well for years (both the devisers/marketers of the brands and the brewers) and that business model makes a lot of sense to me. I guess the Pogues are doing that too. But the Kulsveen plan has to warm the hearts of any bourbon fan and their venture deserves much respect and support.

Gary

[cowdery]

As Gary says, the aging cycle makes the bourbon business insane. Paying the taxes and complying with other government regulations is another barrier to entry. Although production has been steadily increasing and some companies--most notably Maker's Mark--are producing at or near capacity, there are ways to increase production further without building entirely new facilities. There are several relatively modern facilities out there (Old Grand-Dad in Frankfort, Glenmore in Owensboro, Stitzel-Weller in Shively) in mothballs, which could be reactivated if there was really a need for a high-volume production facility.

Although there now seems to be a shortage of older whiskies--say, 12+ years--in the bulk market, there is no indication that there is any shortage of younger bulk whiskey.

Also, although the American Whiskey industry is now pretty healthy because of the growth of profitable premium brands, overall sales volume is still pretty flat, maybe slightly up, but definitely not growing by leaps and bounds.

What we probably will see are projects like Kulsveen's, where the distillery itself will be small but picturesque and tourism will be a key part of the business proposition. Most of the moth-balled distilleries don't really lend themselves to that. Owensboro is too far from the bourbon heartland and Old Grand-Dad looks like a chemical plant (although it is in a nice setting). Old Fitzgerald (i.e., Stitzel-Weller) has a lot of potential, but I understand there is an asbestos abatement issue there.

Personally, I have a problem with the idea that tourism-oriented distilleries should use pot stills. I respect what Woodford Reserve has done and I think what Kulsveen is doing is great, but what I would really like to see is a smallish, tourism-oriented facility using a column still and doubler, since that is really the American whiskey tradition.

[drew_kulsveen]

Actually Chuck, we do still have the old Willett doubler and column still that will also be in operation. The pot still pictured on this forum will be used for making and refining whiskey. We are trying to setup our facilities to be as flexible as we can. We aren't trying to go for the tourism thing. We are trying to restore and beautify our plant, so when you come and visit (that's your invatation), you feel that you have step back into the early days of our distillery. By the way everyone, thanks for the support. We are really trying hard to finish things up. We'll keep you posted.

-Drew

[TNbourbon]

Hi, Drew -- good to hear from you again. When to you anticipate distillery operations getting underway again? Who will be master distiller? And, you going to make it to the Sampler in April so we can taste some of that old Willets stock you still have laying around ?
Some of us will be in Bardstown in late-April -- is a tour possible then?

[angelshare]

As Gary says, the aging cycle makes the bourbon business insane. Paying the taxes and complying with other government regulations is another barrier to entry.

Although not a bourbon distillery, the Copper Fox distillery is relatively new and fairly close to our home. We are trying to arrange a tour and are anxious to hear how the owner dealt with the obstacles to establishing a new facility. Has anybody else toured Copper Fox?

Given that the whiskey is only 4 months old, he obviously does not have to wait on the returns nearly as long as he would with a bourbon.

[Strayed]

...Personally, I have a problem with the idea that tourism-oriented distilleries should use pot stills. I respect what Woodford Reserve has done and I think what Kulsveen is doing is great, but what I would really like to see is a smallish, tourism-oriented facility using a column still and doubler, since that is really the American whiskey tradition.

I think probably Maker's Mark does that pretty well. For tourists who visit the distillery it gives the appearance of being no larger than Woodford.

And to tell the truth, all the American pot-still distilleries and, except for Makers' showplace, all the column-still distilleries that size and smaller failed. The fact is that American distilleries, like it or not, really ARE whiskey refineries. Column stills are 3 to 5 feet in diameter, and Mike Veach says they're 3 or 4 stories high although I think I've only seen them at 4 stories. Compare that with the column stills commonly used by craft distillers. If this technology were available to farmer-distillers throughout most of bourbon's tradition-forming years the concept of "old time traditional whiskey" might have been column still/doubler instead of pot still.

I do agree, though, that idolizing a technology that you're spending hundreds of thousands of dollars to eliminate or replace seems kind of silly.

[cowdery]

That still looks like the one John Hall uses for Forty Creek, which he says is German-made and intended for fruit spirits.

The term "whiskey refinery" seems unnecessarily pejorative. Additionally, American whiskey stills are much smaller than, for example, GNS stills or even the grain whiskey stills used in Scotland.

I believe the original Maker's Mark operation is capable of filling 250 barrels a day. They doubled that in 1996 by building, in effect, a duplicate distillery behind the pretty one. They will soon be breaking ground on a third, identical plant.

[Strayed]

That particular one is in Michigan and used for fruit brandy.

Was I being incorrect in my use of the term "whiskey refinery", or just realistic? I enjoy the Disney version of the American Tradition just as much as anyone, but that doesn't require me to believe that it is, or ever really was, true. What Maker's Mark is showing to visitors is a very pretty, painted and polished working example of what a typical commercial distillery in America was like during the time of Walt Disney's Main Street.

At Maker's Mark there's a distiller with a nosing glass,
And in the tail-box all his new-make sparkles clean;
He likes the thumper's shiney copper sheen,
It’s a clean machine...

Maker's Mark ... is in my ears and in my eyes...


It's not the way distilleries really were, and it certainly isn't the way they are today, not even Maker's Mark, as you point out. I'll bet there isn't a single participant on this forum, regardless of where in the world they live, who hasn't seen Maker's Mark available in a venue near them. You don't believe Bill Samuels is squeezing all those bottles out of the li'l ol' still the visitors are shown in Loretto, do you? Woodford does the same thing, only it's "hidden still" is a few counties away in Shiveley.

That doesn't detract from the beauty of those sites, nor from the experience of visiting them. It's just that (1) Like you said, the commercial-sized pot stills of Woodford don't really represent the American Tradition, and (2) like I said, the column still at Maker's only seems to represent it because it's small and clean, the way we'd like to think individual distillers were.

But, while small, rural farm America is the tradition we'd all LIKE to have, the fact is that the tradition that relates most to whiskey is Carnegie/Rockefeller/Rosentiel/Walker Industrial America. Where even in Sam Cecil's wonderful book dedicated to keeping the memory of the REAL Kentucky distillers alive through photos and stories, the signifcance of each distillery is measured, not by the esteem at which their whiskey was held, but only by their daily production figures.

So, if the American Tradition were allowed to exist (and by the way, we must remember that it is illegal in Traditional America to even TALK about distilling beverage alcohol unless we've taken measures to ensure that minors can't hear us) I believe it would be small column stills like these that would be used.

[gillmang]

Still type is not relevant. In the past (up to Prohibition and after for a while) there were many kinds of stills and variations on the theme (pot stills, 3-chambered beer stills, larger beers stills, those with doubling equipment, those with not, those with reflux, those with not, etc.). What is important is there were numerous producers, some big, many small or medium-size, and you got a profusion of styles and tastes. I think some of the proponents of the pot still resurrection idea take impetus from Scotland, or perhaps by transference from the idea that top-fermented beer is more traditional than bottom-fermented beer (which is true). But it is different in distilling because column stills can be operated to reduce fractionating efficiency and are in the U.S. to make spirit that will become bourbon or rye. There are issues related to throughput and overhead and production costs that pertain to one kind of production system over another but they need not, from a consumer standpoint, detain us here. Look at this way: one of the most traditional, heavy-flavoured French brandies, armagnac, has been made in column stills (mostly) since the mid-1800's. They distill in one run, just like many bourbon makers used to (Cecil mentions a few in his book). Is anyone going to say that is not real brandy when much of that armagnac is more flavourful than a lot of double pot-distilled cognac out there? It is an error to get hung up on pot vs. column stills, in my opinion. It is the final distillation proof that is more important to whether spirit can become genuine whiskey and column stills can, again, be operated to produce low-proof spirit. That said, I think it is great some people may want to use pot stills to make whiskey, more power to them, but this is not inherently a "better" way to make whiskey. The palate of the taster/blender, the raw materials used and the proportions, the type of fermentation (including yeast type), barrel type and aging length are in my view more important to the final result, given that you start with a distillate under 160 proof, than the type of still used.

Gary

[Strayed]

Gary, I agree with you completely about the diversity of distilling apparatus. And also that, although the choice of machinery may affect the nature of the spirit, the flavor quality has many more aspects than just that. Your example of armagnac brings that point home very clearly.

I was mainly addressing Chuck's comment about The American Tradition. Part of the environment in this country (and others, of course) is the near-constant promotion of socially-acceptable values as if they were long-held traditions. American beverage spirits make a great example for this, because they've been at the center of some of our most powerful disagreements as to just what those values and traditions are. Chuck's knowledge, familiarity, and intelligent interest in bourbon whiskey gives him a viewpoint of it's social value that's entirely different from that of, say, Fast Eddie in the movie The Hustler. But Fast Eddies make up a much larger portion of the bourbon-drinking public than do Chuck Cowderys, John Lipmans, or Gary Gilmans (all right, so that would be Canadian Traditions - is it much different?). Chuck's Chicago background and his interest in the Blues brings in another American "tradition" you won't be seeing displayed at Beam's Outpost, that of bourbon as an amplifier for heroin. This is not the sort of image that either the music industry or the spirits industry would like to promote, but for most of its history, that would fit very solidly with bourbon's place, at least in American urban society. Someday (after the E. Penn - Maryland part gets re-worked a few more times and finally posted) our web page expects to take on the connections between rye whiskey and New England rum. And I dread handling the tradition and heritage of the Rhode Island rum distillers (and the slave trade that it can't be separated from) as seen through today's values. But if you were T. William Samuels and it was a New England rum facility you were restoring for the tourist trade, you'd probably treat it exactly the same way as that little bourbon distillery in Loretto Kentucky. We Americans like our traditions clean and pretty, even if they really aren't. We also like things to be small and family-run, even if they really aren't. So when I used the term "whiskey refinery" it was, as Chuck noted, intended to rankle us a little and make us take notice. By the way, for readers who aren't aware of this, column stills (normally much larger, of course) are the same type of equipment used to "distill" gasoline and gear lube from crude oil. Now, do you think the production manager of a petroleum refinery is any less proud of the quality of his gasoline than Parker Beam is of his bourbon? Of course not. But The American Tradition tends to favor small, family enterprises over big ol' nasty industrial monsters, so we think of "refinery" as "them" and "distillery" as "us". What KIND of distillery? Well, I think that's what Chuck was referring to in his comment about the pot stills, and that's also what I was expanding that idea on about four-story tall column stills.

Things that make you wonder... Suppose some enterprising petroleum company decided to build a little oil well and refinery, along the lines of Drake's original in Pennsylvania, with cute, clean, freshly-painted little buildings, shiney equipment, and a gift shop. Forty years later, do you suppose there would be an internet forum of afficianados debating the qualities of one gasoline or another?

[cowdery]

We may be talking about different things here and I hope, John, that you weren't including me in the "prettyification" conspiracy, because I think my work has been about anything but. All I was trying to say about the "American tradition" is that for the past 100 years or so, American whiskey has primarily been produced in column stills. While there is nothing wrong with making any distillate in a pot still, I disagree with Bill Owens (American Distiller), who seems to feel that the only type of still a true artisan would use is a pot. I think that position is narrow-minded and contrary to the American whiskey-making tradition. The very notion that it takes some small, artisan operation to make great whiskey is effectively belied by the kudos being bestowed on Buffalo Trace which, after all, is the largest distillery in Kentucky.

[gillmang]

Well put and I see what you mean. This is image-making, an important part of commercial advertising. I remember in that 1933 Fortune magazine article, which Chuck has read too I think, the statement was made that when the industry would start again it would become the age of established brands and the industry would benefit from the great advances in the 1920's in national marketing and merchandising. How true that became, e.g. the 1930's National Distillers ads (often featuring a quartet of whiskey bottles in beautiful color, usually 3 bourbons and a rye or 2 of each) were very sophisticated. At that time, whiskey was presented (except for certain price brands) as an upper class beverage. Later in the 1950's, some of that continued (e.g. Maker's Mark) but a lot switched to the folksy approach even for the high end, e.g. Stitzel-Weller as shown by those ad letters Mike reproduced and of course the Jack Daniel advertising. Probably the latter occured as America was becoming, or seen to be becoming, more democratic, so then whiskey could be presented as just folks and everyone would be happy (since the monied city classes like to know too their whiskey has an old rural pedigree). But to me it's all flash and froth, I go right to the substance of it. Thus, I don't care if something costs $15 or $40, and I am not swayed by the hype, if I think the $15 product is better I'll buy that. I think we all know there is a bit of a game going on when we tour, say, Maker's Mark, sure it is owned by a big international company (Allied Domecq) and has been for yonks of time and there is more to production than meets the eye but that's okay, I don't mind, I understand they have to do that and s that's fine, that's fair ball to me. Companies need to sell and need to promote. There is enough good whiskey out there that I pays my money and takes my choice but I can enjoy those tours too, it is all part of the system we live in and I ain't found a better one yet.

Gary

[Strayed]

...I hope, John, that you weren't including me in the "prettyification" conspiracy, because I think my work has been about anything but.

I don't think it's a "conspiracy", and yes I do include you. But only to the extent that I include myself and most everyone else I know. It's what we do. In fact, "prettyizing" IS an American tradition. There's nothing wrong with that, and you shouldn't feel I was being negative toward you for mentioning it. The Lomax tapes are no more "valid" an example of American Blues tradition than a Stax/Volt record.

...I disagree with Bill Owens (American Distiller), who seems to feel that the only type of still a true artisan would use is a pot.

The company that make the artisan-sized column still in the photo is featured on Bill's website.

I think that position is narrow-minded and contrary to the American whiskey-making tradition. The very notion that it takes some small, artisan operation to make great whiskey is effectively belied by the kudos being bestowed on Buffalo Trace which, after all, is the largest distillery in Kentucky.

I'm really NOT trying to contradict what you were saying; I'm trying to reinforce and expand on it. What we think of as the tradition of American bourbon is a composite created by overlaying a product produced in a large commercial whiskey factory onto our nostalgic image of "simpler times, when small families lived off the land", and it was fabricated by the marketers of post-prohibition federal-recipe straight whiskey. Yes, there were indeed farmer-distillers who had their family still and made corn whiskey in it. But they were not making bourbon or monongahela. And the truth is, no one takes the liquor they made (and still do) seriously. Mike Veach is the only person I know other than myself who will publicly admit that they enjoy corn whiskey, and I think even Mike thinks of it more as a novelty than as fine spirit.

THAT tradition is very much centered around pot stills. And in the very earliest years, so was bourbon. But bourbon-as-we-know-it didn't really come about until the advent of the column still, and since all the whiskey refineries lie about pot stills on their labels, the tradition became applied to bourbon. I don't disagree with you at all that it shouldn't be. I certainly agree with you about the quality of the bourbon coming from Buffalo Trace, but all that says is that the terms "refinery" or "refectory" shouldn't be assigned the negative color that they have obviously been given by our need to prettyize things.

Again in musical terms, yes, the C.F.Martin plant in Nazareth, PA is a fairly small woodshop with a small number of artisans carefully handcrafting each individual instrument. I know. I've been there. But Fender Musical Instruments Corporation, with manufacturing facilities in nine countries around the world is no less an American tradition.

Now, aren't I saying the same thing you did, just in other ways? That's all I was trying to do.

[gillmang]

We have to remember that what is now presented as authentic, down-home, just folks is to a large degree a construct, a device serving a valid purpose: preserving and enhancing the democratic ethos. And business no less than other units of society use that idea to further its interest. Each person is viewed as valid, authentic, important, and this tends to encourage a craft culture or rather (in most cases) a modern technological one which appeals to images of an (imagined) pastoral past (hence e.g. the early and continued success of Starbucks and its real coffees, or Roots clothing in Canada; maybe Levi jeans is the best and certainly one of the first examples, originally it was serviceable work clothing but then morphed self-consciously into something different).

It is important to note this wasn't always so. Whiskey, or a lot of it, was merchandised on a different model after Prohibition (and before) until the 1950's. The model was the ancestral drink of the monied class (early ads often are set on the "plantation", or the club, or the city mansion). At the same time producers vaunted that the drink, while unchanging in quality for generations, was made to latest scientific methods. Associated to this idea was that of modernity, sanitation and hygiene and efficient production concepts, these are legion in the old ads. Tradition was therefore allied to modernity but the tradition was the main focus and it was one of gracious living, old ancestors, the Mayflower, and so forth. This is why it was easy at the time to sell the idea of blended whiskey, it looked elegant, things that are light and mild are said to be elegant and ads were used to push this side of whiskey, they made a cheapening of the product look like an improvement, as "progress". Products such as Overholt rye started to look old-fashioned and in many cases disappeared from the market (although Overholt itself survived, after a fashion).

But then attitudes changed especially after WW II. There was a broadening of the democratic ethos that has always been part of America, of the concept of individual rights and inherent dignity and the importance of unspoiled nature. And so industry stopped appealing, largely, to concepts of an established elite class and scientific modernity in manufacturing methods (remember those huge smokestacks shown belching proudly in the old ads?). In that 1933 Fortune magazine which contains an article projecting the post-Prohibition whiskey business, the ads are completely different than those of today; they show an elite lifestyle whereas today's ads are more egalitarian. Modern promotion has turned to concepts of authenticity, real or imagined; to the smaller-scale; to individualism; and regionalism. This started in the 1950's with Jack Daniel's advertising and was a progenitor of similar campaigns in the 1960's (think of Volkswagon's, or the first Apple computer ads). This reflected the underlying prevalent societal attitudes and profound changes. This trend has only been accentuated since. Maker's Mark ads cleverly combined aspects of old and new, they appealed to rural non-class-based values such as tradition and the small-scale but at the same time promoted the wheat recipe as novel and frankly appealed to those who could afford to buy the product. The microbreweries when they came advertised heavily on simple production methods that were artisanal, small-scale, traditional: as Creemore Brewery in Ontario proudly announces, "we are 100 years behind the times". Of course Anchor Distilling has done essentially the same but so did the large distillers which advertised.

Ads reflect social attitudes. We still live in the shadow of the 1960's which put a renewed emphasis on human values (supposedly) but that could only have happened after a certain maturation of the country and its economy, it was also a result of war (Second War, Korean and Vietnam Wars) and the anomie of modern life which was increased by the fear of atomic war. None of this has any necessary connection to product quality. A product can be great, as made made by a large company, or not so great, as made by a small company, or vice-versa. The rest is all up to the marketers and I let them do their job, but I try to cut through all this and focus on the product. Bourbon is Janus-like in reflecting traditional values and modern values. Bourbon arose from the country, from the simpler corn whiskey, but was greatly assisted in its development by scientific methods right from the beginning (e.g. Crow, even M'Harry with his rigourous explanations of detail and method, the onset of steam distillation and the column still). Almost everyone could afford cheap corn whiskey but long-aged bourbon has always been a luxury, something until recently only the monied could afford on a regular basis. Bourbon therefore reflects the different, sometimes contradictory sides of America and as I say at different times the emphasis is put on one or the other of these aspects as a function of prevailing social attitudes.

Gary