Wednesday, May 4, 2016

Beam Suntory Makes Statement about 50 Cent Vodka Brouhaha

Actor-rapper 50 Cent (Curtis Jackson) is all over the news today, at least in southwestern Ohio, because of a video he posted in which he mocks a handicapped teenager who 'Fitty' thought might be on drugs. The performer was in Cincinnati doing promotion for Effen Vodka, for which he is a paid endorser. Now major stores and bars in the region, including where he had just appeared, are boycotting Effen in protest. Upcoming appearances by 50 Cent in St Louis have been cancelled because of the flap.

He has since apologized but the damage is probably done. No one in the retail community is in a hurry to get the brand back on the shelves. Boycotting Effen is a pretty low-cost protest for the retailers since the brand is not a big seller in a category jammed with alternatives.

So far, none of the news accounts have mentioned that Beam Suntory is the brand owner. Might the boycott spread to other Beam Suntory products such as Jim Beam itself?

What does Beam Suntory have to say about it? Just this.

"As a brand that considers social responsibility the highest of priorities, EFFEN® Vodka does not condone the recent behavior of 50 Cent. We have expressed to him our profound disappointment for his actions, which are in no way representative of the brand’s values."

That probably won't be enough. They should have fired him immediately, before the Beam Suntory name gets dragged into it as it inevitably will. Now, in a way, they can't since they have publicly admonished him and he has expressed contrition.

Beam acquired Effen Vodka in 2009 in an odd deal that sent Old Taylor Bourbon to Sazerac. The brand's creator, Constellation Brands, had dumped it along with a basket full of other cats and dogs when it decided to reduce its footprint in distilled spirits.

Monday, May 2, 2016

Jim Beam Is Filling 500,000 Barrels a Year. That Is the Real Story

Kentucky Governor Matt Bevin and Beam Master Distiller Fred Noe fondle barrel number 14,000,000.
Jim Beam (Beam Suntory) filled its 14 millionth barrel today. That is 14 million barrels (53 gallons each) since the distillery reopened after Prohibition. Put another way, it is 14 million barrels in 83 years. That averages out to 168,675 barrels per year, but it has been just two years since barrel number 13 million was filled, so the current rate is 500,000 barrels a year. That is the key information to take from this milestone.

Not only is bourbon booming today, this means the major producers believe it will continue booming for many years to come.

Million-barrel milestones are a traditional photo opportunity for Kentucky's biggest distilleries. Today Matt Bevin, Kentucky's new governor, joined the festivities at Beam's Clermont distillery in Bullitt County. For the milestone, Beam counts barrels filled there and at the Booker Noe Distillery in Nelson County. It does not count barrels produced at Beam Suntory's Maker's Mark Distillery in Marion County.

"Kentucky bourbon has become not only an American icon, but an international symbol of our proud heritage and craftsmanship," said Governor Bevin. "I'm pleased to toast Jim Beam's impressive milestone, rich history and spirited future."

Kentucky's whiskey-makers did well during the eight years Steve Beshear was governor. Eric Gregory, president of the Kentucky Distillers Association, took office shortly after Beshear did, so he has never worked with any other governor. Bevin, a Republican, succeeded Beshear, a Democrat, who had succeeded a Republican, Ernie Fletcher, but the current productive partnership between the state and one of its signature industries mostly developed under Beshear.

Bourbon is crucial to Kentucky's economy, in terms of whiskey production and its associated industries (e.g., cooperage), as well as its contribution to tourism (Kentucky's third largest industry). According to the Kentucky Distillers' Association, bourbon is now a $3 billion industry in the state, providing more than 15,000 jobs and generating more than $166 million in tax revenues annually. Over the past five years, the bourbon industry has grown 35 percent. Over the next five years, Beam Suntory alone plans to invest more than $1 billion to make bourbon in the Commonwealth.

Virtually all of the growth in bourbon production, distillery expansion, new distillery development, and bourbon tourism occurred during the Beshear administration. He showed up at just about every event, to welcome new distilleries to the Kentucky Bourbon Trail, to honor Master Distillers, and to commemorate industry milestones. It was something Kentuckians and industry watchers had never seen before, their governor arm-in-arm with the commonwealth's whiskey interests.

Many Kentucky producers, large and small, and many others involved with the industry held their breath when the administrations turned over this past December. Bevin ran as a pro-business conservative, but also as a social conservative. Many of his supporters are rabidly against alcohol consumption in any form. Bevin was also a wild card because he had never held elective office before. It was impossible to know for sure if there would be any change in Frankfort for the whiskey industry.

Bevin also attended today's groundbreaking for the new Luxco Distillery just outside of Bardstown.

So it is good, reassuring, to see Governor Bevin at a distillery, pounding in a bung, and smiling for pictures with his hand on a whiskey barrel. We hope he will be supportive in more tangible ways too.

Thursday, April 28, 2016

Here Is the Scoop on Jim Rutledge from the Man Himself

Rumors about Jim Rutledge have been burning up the interwebs for the last few days. Today, he revealed his plans. To get right to the heart of the matter, click on "Jim's Message" and watch the video.

Just in case you don't know, which is hard to imagine, Rutledge was Master Distiller at Four Roses Distillery for nearly 21 years. He has been in the distilling business for 50 years, most of that with Seagrams and its successors, until Four Roses was sold to Kirin in 2002. He started out at Seagram’s Calvert Distillery in Shively (a Louisville suburb).

Rutledge was inducted into the Kentucky Bourbon Hall of Fame in the inaugural class (2001) along with Parker Beam, Lincoln Henderson, Elmer T. Lee, Fred McMillen, Booker Noe, Jimmy Russell, and Bill Samuels, Jr. He served on the Board of Directors of the Kentucky Distillers Association for 13 years and on the Board of Directors of the Kentucky Bourbon Festival for 9 years – the last 7 years as Chairman.

Without his advocacy, it is possible Four Roses Bourbon would never have been re-introduced into the U.S. market. His initial argument was that they should at least sell it in Kentucky so the people who made it could buy it. He then led the brand's re-launch into all 50 states, in the process visiting most of them as brand ambassador.

His partners in the new venture are a lawyer and a finance guy, both of whom are industry veterans.

They plan to raise some of their capital through crowdfunding, but that site won't go live until next week.

Monday, April 25, 2016

We've Got Trouble, Right Here in Derby City

Jay Blevins is missing.

The 41-year-old former co-owner of Louisville's Derby City Spirits (formerly Derby City Shine) is accused of stealing thousands of dollars by renting out an event space at the distillery he no longer owns. He has been missing for several weeks and no one seems to know where he is.

Last September, Blevins and partner Harrison Hyden were in trouble for distilling without the necessary state and local licenses. A year before that, it was all upbeat as Blevins and Hyden looked set to revitalize a shuttered bar in Phoenix Hill, a long-popular Louisville entertainment neighborhood that has seen better days.

It was a large space and they had big plans for it. They said they would be the city's first craft distillery featuring a full line of spirits, including vodka, rum, gin and flavored 'moonshine.' All of their spirits would have a cane sugar base. Plans included an event space, bar, 'mock' casino, and retail store. It all seems faintly preposterous now, in light of the collapse, but even a year ago coverage was glowing in the local press.

Earlier this year, when Blevins and Hyden were unable to sort out their licensing issues, they sold the business to one of their investors. Blevins, meanwhile, started to take deposits to rent the distillery's event space, even though he no longer owned it, and it still didn't have the necessary permits. He still had keys to the place and showed it to people who paid up to $2,500 to rent it for wedding receptions and other events. Catering, he told them, would be handled by a nearby restaurant. When people began to show up for their events only to find the space locked, Jay Blevins took off.

All of that was bad enough, but now with the police involved and the local press taking a hard look, things have begun to get really weird.

In Louisville, Blevins left behind his business partner as well as his fiancée and their newborn son. Since 2009, when he moved to Louisville and started to work at Buckhead Mountain Grill, a chain restaurant with two Louisville-area locations, everyone knew him as Jay, only that isn't his real name. He is really Benjamin Blevins, brother of the real John 'Jay' Blevins, who still lives in Tennessee where they are both from. The real Jay Blevins has made several criminal complaints against his brother for identity theft.

You can understand why Benjamin Blevins might want to pose as his law-abiding brother. Benjamin Blevins has a string of criminal arrests and convictions in both Tennessee and North Carolina, including check kiting, money laundering, breaking and entering, forgery, possession of stolen goods, and...well, you get the picture.

In retrospect there were probably signs. The distillery plans seemed both vague and overly grand. With dozens of craft distilleries opening left and right, the template for doing it legally seems pretty well known. Maybe friends should have become suspicious when he spelled his name 'Blevenzze' on his Facebook page.

So far, only Blevins is accused of any wrongdoing. Everyone else seem to have been taken in by a 'good guy' who seemed to be a hard worker. The new owner still hopes to make the business a reality. We will see but, clearly, the Derby City name deserves better.

Friday, April 15, 2016

Are Whiskey Warehouses 'Agricultural'?

Warehouses at the Willett Distillery (Bardstown) back in the day.
The Lexington Herald Leader reported Wednesday that Brown-Forman wants to build twelve bourbon warehouses near Midway on land zoned for agricultural use. This raised the question of whether or not bourbon aging is an agricultural pursuit. The site is in Woodford County and would serve Brown-Forman's Woodford Reserve Distillery. The warehouses will be built over a 12-year period. When completed they will have a capacity of 900,000 barrels.

Before it can go forward, the proposal must be approved by the Woodford County Board of Adjustment, which has forwarded it to the county's Agricultural Advisory Review Committee. Some members have expressed skepticism. “It does seem kind of a stretch to call the making of bourbon an agricultural enterprise,” said one of them.

Bourbon warehouses can be built close together in an industrial park or other places zoned for industry, but a site with lots of land where the buildings can be widely spaced has advantages. It is safer from the standpoint of fires, and good for the whiskey because of better air circulation. A rural site with few neighbors avoids complaints about the inevitable harmless black fungus that always grows near whiskey warehouses. Using land zoned for agricultural use also has tax advantages.

If bourbon aging is not an agricultural activity, it would be equally hard to call it an industrial activity. No processing is done on the whiskey in the warehouses. No machines are involved. There are no moving parts. Rural warehouses, unlike urban ones, have no climate controls beyond opening and closing the windows. Putting new barrels in and taking mature barrels out is just about the only activity.

If bourbon aging is not an agricultural use, it is certainly compatible with such use. At the Four Roses warehousing site at Cox's Creek, cows graze on the grass between buildings.

When Kentucky was a major producer of tobacco, nobody argued that tobacco warehouses were not an agricultural use.

The reality is probably that bourbon aging is a unique land use, not anticipated in normal distinctions between agricultural, industrial and commercial classifications. If any state can sort that out and accommodate it correctly, that state should be Kentucky.

As a footnote, this is another example of the fine job the Lexington Herald-Leader does covering the state's whiskey-making business. They are the best in the state.

Wednesday, April 13, 2016

New Bourbons from Brown-Forman and Beam Suntory Emphasize the Role of Wood

Brown-Forman is the only major American whiskey distiller that also owns cooperages and makes all of its own barrels, a fact celebrated by its new bourbon, Coopers' Craft. Beam Suntory buys barrels from Independent Stave Company and others, and had to buy twice as many to make its new bourbon, Jim Beam Double Oak.

Brown-Forman's last new bourbon brand was Woodford Reserve, launched 20 years ago. Made at the Brown-Forman Distillery where Old Forester and Early Times are also made, Coopers' Craft has its own unique mash bill of 75 percent corn, 15 percent rye, and 10 percent malted barley. That is a little less rye than the Old Forester/Woodford Reserve recipe (18 percent) and a little more than Early Times (11 percent).

But that's not what Coopers' Craft is about. It is, instead, "a celebration of barrel-making and a recognition of the importance of wood when it comes to crafting bourbon. In addition to being matured in barrels raised by master coopers at the Brown-Forman Cooperage, Coopers’ Craft is crafted using a special beech and birch charcoal filter finishing process, creating a smooth and flavorful bourbon."

Do you think they want to position this as a craft whiskey?

The Coopers' Craft neck label describes it as "Toasted Wood Whiskey," but the press release is silent about what that means. An inquiry produced this explanation: "Toasted wood whiskey is the result of Brown-Forman Cooperage’s proprietary process during which we toast the staves ahead of charring."

Although it is not always done, stave toasting is nothing new. It involves heating the wood enough to change its characteristics without setting it on fire, which is the charring process that comes later. Something must be unique about how they toast the staves that is 'proprietary,' which means "we're not telling."

Similarly, charcoal filtering just prior to bottling is an almost universal practice, not to be confused with the Lincoln County Process used at Jack Daniel's, which involves new make distillate before aging and a lot more charcoal. Charcoal filtering just prior to bottling, usually called 'chill filtering' because the whiskey is chilled as part of the process, is intended to prevent 'flocking,' aka 'chill haze.' It is often criticized as removing flavor for a merely cosmetic benefit, but Brown-Forman says it makes Coopers' Craft more flavorful. They are also the only producer to name the woods used for their finishing charcoal. Beech, by the way, is the wood Budweiser claims makes its beer so good.

When it goes on sale this summer, Coopers’ Craft will be available in Alabama, Florida, Georgia, Kentucky, Louisiana, Mississippi, South Carolina and Tennessee. In part, this may reflect where Brown-Forman's two cooperages are located, in Kentucky and Alabama. It will be 82.2° proof. Suggested retail is 28.99 for a 750ml bottle.

Jim Beam Double Oak comes in a little cheaper, at $22.99 for a 750ml bottle. What this is is Jim Beam white label, aged four years, that has gone into a second new, charred oak barrel for some 'proprietary' length of time. It tastes like a wood finish, not unlike Woodford Reserve Double Oaked or Maker's 46. The lab sample I tasted was 86° proof. Jim Beam Double Oak was released in the UK, Germany, and Travel Retail last month but they don't even have a COLA yet so look for it here perhaps late summer or fall.

Wood treatments are generally considered 'authentic' by enthusiasts and are not scorned like products that get their modified flavor by mixing the bourbon with another liquid. That said, Beam Suntory Americas President Tim Hassett just yesterday described Jim Beam Apple (a mixture of Jim Beam bourbon and apple liqueur) as "the most successful launch in the brand’s history."

One thing Jim Beam Double Oak tells us is that the Scots are paying high prices for used barrels right now. American distillers have little use for second-fill barrels except as a by-product. Most are sold to scotch producers. A whiskey such as Jim Beam Double Oak is only practical if the difference is small between the cost of a new barrel and price being paid for used ones.

Both companies are to be commended for introducing new products in the sub-$30 price segment. Coopers' Craft is Kentucky Straight Bourbon Whiskey without qualifications. Jim Beam Double Oak is Kentucky Straight Bourbon Whiskey Finished in Oak.

Sunday, April 10, 2016

The Golden Age of American Whiskey? You're Living in It

A small subset of whiskey enthusiasts are 'dusty hunters.' Since whiskey keeps in the bottle indefinitely and some retailers have lax inventory controls, the odd bottle or two can sit on a shelf gathering dust for decades. Often these finds still bear their original price tags.

Dusties are also found at estate sales and in the liquor cabinets, or under the kitchen sinks, of elderly relatives after their demise.

Especially prized are bottles believed to have originated at long-closed distilleries. Favorites include Stitzel-Weller in Shively (Louisville), National's Old Grand-Dad Distillery in Frankfort, and Heaven Hill's distillery in Bardstown. Some of the best I've tasted came from Cummins-Collins in Athertonville.

Not surprisingly, some practitioners of this pastime declare these old bottles to be universally better than modern production. It's all very subjective, of course, as is this:

American whiskey has never been better, more plentiful, nor more diverse than it is now. We've never had better access to reliable information about what we're drinking and prices, all things considered, aren't bad. Producers large and small are innovating like never before. The Golden Age of American Whiskey? This is it. It's now. Thank your lucky stars and enjoy it.

That's not to take anything away from dusty hunting. It's fun and if you know what you're doing, some terrific drinks can be had.

What about those older bottles? Are they really better? Here's the thing. Although dusties can come from any era, a great many were bottled in the 80s and 90s. It just stands to reason that the most plentiful dusties are the most recent ones.

The 80s and 90s are known as the 'glut period.' When bourbon sales began to tank in the late 60s, most producers assumed the decline was temporary and would be brief so they didn't reduce production right away. As sales continued to decline, that excess (most of it still in barrels) continued to grow and move through the pipeline.

By the 1980s, there was so much excess whiskey in storage that producers were routinely bottling 8- to 10-year-old whiskey in their inexpensive mid-range NAS products. If you were drinking bourbon during that period or have had dusties from it, it is easy to reach the conclusion that whiskey then was 'better.' That phenomenon had nothing to do with how the whiskey was being distilled or aged, except for the length of aging. And that was unintentional.

And although it was a boon for drinkers, it was horrible for the producers. They were losing money hand over fist.

If we're suffering from anything now it's the opposite of that phenomenon, NAS products that are a little too young due to tight supplies of well-aged liquid. That will correct itself in short order, probably.

During the glut period, not a lot of new whiskey was made each year. Distilleries are like furnaces. They don't have variable speeds, they're either on or off. Back then, a distillery might operate for two months in each six-month season, four months for the year. Or it might go on hiatus for a year to 18 months. The long layoffs were hard on staff and sitting idle wasn't very good for the equipment either. I can't quantify exactly what effect that had on quality, but it can't have been good.

When your business is bleeding profits, you don't invest in the future and needed maintenance is delayed. When prices have to be cut, corners are cut too. Nobody enjoys coming to work.

Today, the business is healthy, new distilleries are opening, existing distilleries are investing, and everybody is working. It's exciting to be part of a robust, dynamic industry. Without question, the Golden Age of bourbon is right now. Enjoy it.