“We have crafted a delicious American whisky that respects tradition but also empowers people to experience something new.” Those are the words from singer, actor, dancer, entrepreneur, multi-hyphenate extraordinaire Beyoncé Knowles-Carter. She had just revealed SirDavis, her new whisky (she chose to drop the letter ‘e’), to the world at the end of August. The spirits world quaked from its impact — the most elevated of the A-list not just fronting a celebrity drinks brand, but co-founding it too. Plus there’s the clout that comes from that founder being Beyoncé.
But she did not build a distillery to create SirDavis. Instead, alongside Bill Lumsden, Glenmorangie’s director of maturing whisky stock, she went to behemoth third-party spirits supplier MGP Ingredients to source the liquid. Never before has the practice of sourcing whisky received such a glitzy celebrity endorsement.
Until now, sourced liquid has carried with it negative connotations. Yet in whisky geographies, from the US to Ireland, Japan to Scotland, and into emerging distilling markets, the use of third-party-produced liquid is as good as standard practice. It is often business as usual for brands to release liquid they have not made themselves. Some — such as Beyoncé’s — do it with great transparency. Others have fallen foul of the outcry that follows after it appears they have misled drinkers. Different markets have various structures in place for trading this third-party liquid, based on distilling history and culture. This can add to the confusion. “What do you mean by ‘sourced’?” asks distilling consultant Brendan McCarron. “One person’s ‘sourced’ is another’s ‘independent bottling’.”
In the US and Canada, sourced whisky is generally widely accepted. Huge companies, like MGP, produce for brands of all shapes, sizes, and ambitions. It even has its own labels, such as Penelope Bourbon. But it also owns distilleries outside of its own vast Indiana premium-whiskey production complex. Lux Row, in Bardstown, Kentucky, is one of them. But that does not mean all MGP liquid is the same.
Off-the-rack mashbills range from 99 per cent corn bourbons to 95 per cent ryes. And, like other sourced businesses, it has built a reputation for excellence. Why would Beyoncé bother otherwise?
Her SirDavis release shows the flexibility of third-party distilling. To borrow from fashion terminology, ‘off the rack’ recipes might suit some. But Beyoncé wanted couture. The bottling’s 51 per cent rye, 49 per cent malted barley mash bill is widely believed to be a world-first. Before the launch, Lumsden confirmed that the MGP team had provided support with prototyping and tweaking. Third-party production offers flexibility through wide-ranging set-ups that in-house set-ups just cannot.
Then there are the finances. If you are building a distillery, you can release sourced liquid while construction is under way, then as your whisky ages, enabling cash to flow. Third-party liquid also offers product development for those whose ambitions do not extend to building their own production facilities. Perhaps they never will. It is here where things can start to become a bit murky if the communication around the liquid feels out of step.
“If you don’t own a distillery and you buy in whisky, but it’s really high quality and you make an excellent product, then if you shout about that, people will love what you do and respect it,” McCarron says. “But if you are inauthentic, or you overly market the ‘heritage’ and ‘craftsmanship’ of the liquid, and that isn’t the part that you’re mainly doing, that’s where the negative connotations of sourced whisky are sometimes justified.”
For MGP’s part, when you take out the impact of a distillery closure over the past quarter, sales for its distilling-solutions business unit soared by 9 per cent from April to June 2024. “Our increasing investments behind our key brands and exciting new product innovation continue to yield positive results, helping us expand our distribution footprint and accelerate our transition into a premier branded spirits company,” says David Bratcher, MGP CEO and president. In the US at least, third-party production seems to have shaken off most of the shadiness.
That is not always the case elsewhere. In Ireland, a combination of arguably outdated labelling requirements and the structure of the industry mean that transparency is not always clear.
For years, there were just two distilleries on the island: Bushmills in the north, Irish Distillers’ Midleton in the south. In 1987, Cooley joined the party. Since then, the category has exploded, with more than 80 licensed distilleries today. The trouble is that many of them have come online in the past 10 years, and a huge portion of those in the past three. They do not yet have liquid that has come of age — but they are ‘releasing’ whiskey. Much of this is sourced from the likes of Great Northern, founded by John Teeling, which saw its first release come of age in 2018. Since then it has developed a thriving third-party business, selling to some of the newer makers. It has become a vital part of the Irish whiskey industry, supporting brands as they develop their own operations. But not everyone discloses this.
“There’s very little transparency in Irish whiskey, which is why I think there’s a little bit of stigma around third-party sourcing,” says Killian O’Sullivan, an independent consultant who works in spirits categories on the commercial side of things. One brand he worked closely with was Connacht Distillery. O’Sullivan says the team was always as clear as it could be about sourcing practices.
“The system isn’t set up to mislead, it just doesn’t clearly tell people where it’s from,” he says about the country’s labelling requirements. While these were toughened in 2019, the Labelling of Irish Whiskey document is set out as a guide, and says much more about what brands cannot do in this area rather than what they must. “Any statements on labels that would appear to give the impression of distilling where distilling is not yet taking place is not permitted,” it reads. “Any specific claims made on the packaging regarding where the product was distilled, matured, or blended must be accurate. Any information provided must be factual, and evidence will be required to support any claims.” What is missing is any requirement to disclose that any liquid is sourced in the first place.
Plus, the whole topic is enforced by the Food Safety Authority of Ireland, rather than the much more specialist Irish Whiskey Association. This seems to be a product of Ireland’s whiskey history. There was very little need to legislate for sourced whiskey when you could count on one hand who was producing. There is additional confusion when it comes to blends. What if a distillery has produced part of its recipe, and sourced the rest?
This is where labelling becomes even more unclear. It is easier, from a labelling standpoint, to just not disclose.
“If someone really wants to know where a whiskey is from, they end up on Facebook groups and online fora,” O’Sullivan continues. He has been tagged in discussions, and he says he is always happy to disclose the provenance details that end up being omitted from labels.
“I would have happily named ‘distilled at Great Northern’ distillery for the Connacht Whiskey Company,” he explains. “We always spoke about it. And when asked, we said ‘no-one makes better grain whiskey than John Teeling’.” It was a far more practical option for the company than building its own column stills when the eventual ambition was to make the single pot still style. But, much like we saw in 2016 when Scotch makers Compass Box and Bruichladdich were admonished for sharing parts of their whiskies, there is a worry about this more granular labelling. “It would be much healthier for the entire industry, particularly in Ireland, if there was a statement on the labels with where the elements were sourced from.”
In Scotland, for many, the practice of blenders trading casks is so long established that the concept barely raises an eyebrow. “It’s totally uncontroversial,” O’Sullivan states.
As a result, independent bottlers are thriving. One such enterprise is Leith’s Fragrant Drops. Rachel Dixon-Keeble, its operations director, sources whiskies from many places, from the distilleries themselves to brokers, and even private individuals. But while the practice itself is widely accepted, and whisky drinkers love indies, even here there can be some challenges.
“It can get quite murky over contracts,” Dixon-Keeble says. “If you imagine rungs of brokering from the distillery onwards, sometimes old contracts can get lost.” This is much more of an issue when it comes to elements like naming rights than provenance, she explains.
Occasionally new Scotch distilleries will source as a stopgap for product development while their own stocks mature. “If you think about the financial pressures, you can see why they would need to do something like that,” she continues. But where there is transparency, Scotch consumers do not view the product as anything other than a blend or another independent bottling. This is accepted at every point in the industry.
One market that has found itself in hot water over sourcing is Japan — but for different reasons. With next to no culture of cask trading, some makers sourced bulk liquid from Scotland to bottle it in the market. New Japan Spirits and Liqueurs Makers Association labelling requirements, announced in 2021 but enforced for its membership from April 2024, mean that, in brief, all production, maturation, and bottling must take place in Japan for a product to be labelled ‘Japanese whisky’. Some brands publicly state that they do not meet these requirements (Nikka Days is one). The general consensus is that as long as producers are clear about it, whisky drinkers probably do not care.
In the ‘big four’ established whisky markets of Scotland, Ireland, the US, and Japan, sourcing is widespread — but the architecture and acceptance of third-party production look very different. But the need for absolute transparency is uniform across the board. “In an ideal world, which we all know doesn’t exist, you’d want your whisky to come from that [named] distillery, right?” McCarron concludes. Perhaps, yes. But if it’s good enough for Beyoncé…
