Expansion demands

Expansion demands

Charles K.Cowdery looks at what the US distilling community is doing to meet the growing demand for their products

News | 19 Jun 2008 | Issue 72 | By Charles Cowdery

  • Share to:
It’s been 40 years. Right after the Second World War, American whiskey sales boomed. Existing distilleries expanded and many new distilleries were built, as the industry rushed to regain production capacity lost during Prohibition and postponed by the war.The boom was a long one. It continued through the 1960s but rather than just slow down, it crashed; a collapse so colossal it cost the industry half its volume.Because it happened so suddenly, the bust produced a glut of ageing whiskey which only recently has worked its way through the pipeline. The last 40 years have been a long period of stagnation, followed by a slow revival.Exports started that revival. From a small base, American whiskey exports have grown steadily for the last two decades and exceeded $1 billion for the first time in 2007.Today, several of America’s whiskeymakers are operating at near-capacity. A building boom is underway.But to understand the present mood in whiskey country you have to know some of that history. Everyone is glad American whiskey sales are up, at home and abroad, and producers are investing in increased production capacity again, but no one is breaking out the paper hats and noisemakers. There is enthusiasm, even hope, but it is muted by bad memories, cautionary tales our fathers told us, the spectre of good, aged whiskey being redistilled into fuel ethanol because there is no market for it.So industry planners can be excused for taking the short side of the long view.They’re not ignoring the 10 or 20 year thresholds, they just want to get the next five years right.At the Booker Noe Distillery in Boston, Kentucky, Beam Global is increasing its production capacity by 50 per cent, a 25 per cent overall increase between there and nearby Clermont, according to Jeff Conder, vice president Americas operations for Beam Global. Most of what those two distilleries produce is Jim Beam white label Kentucky bourbon.More capacity means more by-product, so they’ve added a fluidised bed spent mash dryer that uses less energy than conventional dryers. One of the final steps in that expansion will be installation of a second beer still.More production creates the need for more aging capacity. The significant growth of eight- and nine-year-old bourbons also strains warehouse space availability, so Beam is building more 50,000-space barrel houses. And because it is preferable to do barrel put-away in daylight, the cistern room had to be expanded.At Beam’s Forks of the Elkhorn site in Frankfort, bottling line capacity is being increased for bourbon but also for the company’s Sauza Tequila and Canadian Club Canadian whiskey lines.As they increase production capacity, Beam and other producers are investing in the visitor experience too. At Clermont, Beam is about to break ground on a completely revamped visitor centre.“It will be a real tour, with a tasting,” promises Conder.In Tennessee, Jack Daniel’s is constantly expanding to meet worldwide demand that has been growing steadily for 20 years. New warehouses are always going up and before he retired earlier this year, master distiller Jimmy Bedford said something about needing a bigger boiler.At Heaven Hill’s distillery in Louisville, master distiller Craig Beam is overseeing a 40 per cent capacity increase that will include new grain handling systems, a third mash cooker, and an increase in the number of mammoth 123,800 gallon fermenters from five to nine.Buffalo Trace, already the single largest distillery in Kentucky, is making only modest capacity enhancements, such as restoring 100-year-old Warehouse D to add 20,000 new barrel spaces.Over in Lawrenceburg, Wild Turkey is well into a programme of building two new 40,000-space warehouses each year. Of all the distilleries planning expansion, Wild Turkey is the most ambitious. In a project beginning this year, parent company Pernod Ricard will increase capacity there by 100 per cent, essentially duplicating the existing plant.Maker’s Mark did the same thing in 1996, duplicated the existing distillery to double its capacity. Now they need to do it again, build a third distillery exactly like the other two, increasing capacity by another 50 per cent.Why do it that way?“My job is to guard the brand and make it the same way it’s been made since 1954,” says Kevin Smith, Maker’s Mark master distiller.One of the infrastructure improvements that had to be completed first was raising the dam on the distillery’s spring-fed lake, and therein lies a dilemma that will face Maker’s in less than a decade. Based on estimates of the spring’s capacity, there isn’t enough water there to expand again.Maker’s Mark is the fastest-growing bourbon in the United States, with sales last year of 800,000 cases. The current distillery can support up to 1.5 million cases, according to Smith.With this expansion it can push that up to 2.2 million, tops. That’s the limit. At the current rate of growth, that limit will be reached by 2016. Mark your calendars.Barton, in Bardstown, is more-or-less content with their capacity (a few minor enhancements are underway) but it is investing in a completely new visitor experience. When it debuts, hopefully during the 2009 Kentucky Bourbon Festival, it will be the first time the Barton Distillery has been open to the general public since the death of its founder, Oscar Getz, in 1982. The Barton site’s distilling heritage goes back to the 1870s. Pam Gover, former director of the Kentucky Bourbon Festival, will be in charge of the new visitor centre.Four Roses has been slowly increasing production, as it steadily reestablishes distribution throughout the United States, but it is doing so with existing capacity.Four Roses makes Bulleit Bourbon for Diageo, a growing brand in the category’s hottest segment, and Brown-Forman and Barton make whiskey for Diageo for its other bourbons, which it ages at the old Stitzel- Weller Distillery in Louisville. Diageo also needs fully-aged bourbon for its blends, both American and Canadian.A Diageo executive recently admitted to me that it may be time for them to re-enter the American whiskey space, at minimum with some kind of home place for Bulleit, but possibly by re-establishing a Kentucky production presence. Diageo still owns the George Dickel Distillery in Tennessee.Owensboro, Kentucky, in the western part of the state, used to be a major whiskey centre, but its last distillery closed in 1991.Now that plant is being revived for Angostura Limited by its parent company, CL Financial.The group, whose Scottish distiller is Burn Stewart, also owns a distillery in Lawrenceburg, Indiana, which makes whiskey but has the labelling impediment of not being in Kentucky, by an unfortunate handful of miles.In growth markets, the rule seems to be that as goes Scotch, so go Irish and American whiskey, each getting their share. All signs point to long-term growth for all whiskeys, but all signs have been wrong before. Let’s just get the next five years right.
Magazine Archive

From the archive

Select an issue

Subscribe Now

Subscriptions for
Whisky Magazine are available
in print, digital or as a
complete package

The Benefits

8 print editions a year

Enjoy the convenience of home delivery

Full access to every digital edition via desktop, iOS or Android device

Latest Issue Subscribe Now

The Whisky Encyclopedia - Coming Soon 2024

Discover the world of whisky with our comprehensive encyclopedia
Featuring companies, distilleries, brands, glossaries, and cocktails

Join The Community

Sign up to the Whisky Magazine
newsletter letter and get access to the latest
in all things whisky

paragraph publishing ltd.   Copyright © 2024 all rights reserved.   Website by Acora One

Consent Preferences