Let Us Take You There!

Boom in Bourbon Leads to Dry Glasses as Supply Catches Up

Bizlex.com
By: Dan Dickson

When someone tells you customers are buying your product almost as fast as you can make it, that’s a good problem and a bad problem. After all, who complains about healthy sales? At the same time, shortages of your product may prompt customers to look elsewhere.

That’s the dilemma facing Kentucky’s popular bourbon industry. Sales are strong, but careful management of the product is essential.

“Times continue to be good. Sales were up again across the board in 2012,” said Eric Gregory, spokesman for the Kentucky Distillers Association. “Premiums, super-premium brands and the small-batch and single-barrel brands continue to drive growth globally, not just here in the United States.”

A recent Makers Mark bourbon shortage drew world attention. The company announced it would lower its alcohol content from 45 percent to 42 percent due to supply-and-demand issues. Customers were outraged. The response was so sharp chief operating officer Rob Samuels quickly reversed the plan and offered a mea culpa.

“You spoke. We listened. And we are sincerely sorry we let you down,” the company statement read.

“It’s part of the art and science of bourbon, and part of the industry’s charm. You just can’t make it overnight. Most premium brands take between six and 12 years to age before bottling,” explained Gregory. “There’s a crystal ball at each distillery. They must predict what their growth will be years ahead. I don’t think 10 years ago anybody predicted the renaissance we’re enjoying today with double-digit annual growth.”

Kentucky produces 95 percent of the world’s bourbon. It creates $2 billion in gross state product each year, according to the KDA. Production has risen by more than 115 percent since 1999. The industry creates about 9,000 direct and spin-off jobs in Kentucky, with an annual payroll of $415 million.

Some of the small-batch Kentucky bourbons are so coveted they are garnering international fame and mystique. One of them is 23-year-old Pappy Van Winkle’s Family Reserve, distilled and bottled by the Sazerac Company at its Buffalo Trace Distillery in Frankfort, Ky. It is one of the most prized bourbons in the world and is so old that a barrel opened today was originally filled when George H.W. Bush was a year into his presidency.

Pappy Van Winkle’s is regarded as one of the finest, rarest bourbons in the marketplace because of its very low production and supply. Some have been known to carefully horde the stuff and save it for only special moments with a select few. It’s that expensive and hard to get.

Despite fetching as much as $600 to $700 per bottle on eBay, Van Winkle isn’t even the most expensive bourbon to be found on the open market. A Brooklyn, N.Y., whiskey bar and restaurant called Char No. 4 has sold 24-year-old Martin Mill at an astounding $100 per ounce, according to a story in the Wall Street Journal.

The Kentucky Bourbon Trail, with seven historic distilleries attached to it, is more popular than ever. A Bourbon Trail Craft Tour, with seven smaller members, was added last year.

“Several more Kentucky craft distilleries are coming,” said Gregory. “Not only are the big boys expanding, but so are small craft artesian distilleries. They’re literally opening as fast as we can keep up with them.”

When some of the craft distilleries opened and launched tours, they approached the KDA board and asked to organize and become a spin-off from the Kentucky Bourbon Trail.

People enjoy visiting craft-tour distilleries, but many are so small they can’t handle hundreds of visitors.

“We’ve already had people complete all seven stops,” said Gregory.

The tour is widespread, from as far west as Marshall County and as far north as Mason County.

One new craft entry is Barrel House Distillery in Lexington. It features several unique products like Oak Rum, aged in bourbon barrels and Pure Blue Vodka, corn-based (corn from Shelby County) with a slight sweet finish.

Then there’s Devil John Moonshine, from the recipe of a Kentucky Civil War soldier and moonshiner.

“It is its own animal, that’s for sure,” said Jim Wiseman, Barrel House’s owner, with a laugh. “Some mixologists in New York and Chicago make really special cocktails with moonshine because it’s very mixable. Of course, most people around here just drink it straight.”

When it comes to bourbon, small is the new big, it would seem.

“We’re bringing unique products to the table that larger distilleries are not,” said Wiseman, who added his biggest markets are probably Chicago and New York. In metropolitan areas, Wiseman said, there are now liquor stores, bars and restaurants that only carry micro-distilled products, so as to set themselves apart from mainstream operations.

For its part, Barrel House is doing what it can to keep those shelves stocked. The distillery has another yet-to-be-named bourbon currently in the works, Wiseman said. How much longer will it take to age?

“Our answer: when it’s ready,” Wiseman said. “Only our bourbon knows for sure.”