Friday, August 29, 2014

Templeton Chairman Tells Des Moines Register, "The Whiskey Is Not the Most Important Thing"


Vern Underwood is Chairman of the Board and CEO of Templeton Rye
Spirits and also Chairman of the Board for Young's Market Company. 
In discussions about widespread violations of TTB rule 5.36(d), and about Potemkin distilleries in general, Templeton Rye has been Exhibit A. Since its founding in 2005, the company has carefully obscured the fact that its whiskey is made in Lawrenceburg, Indiana, from a standard recipe shared by dozens of other brands, and not in Templeton, Iowa from a unique, Prohibition-era moonshine recipe.

Templeton's many lies and obfuscations have been widely reported within the whiskey community, but recently Iowa's largest newspaper, the Des Moines Register, has joined the fray with a series of articles. Today, the company's owner stepped out of the shadows and spoke to Register reporter Josh Hafner. The whole story is here.

In addition to having a lot of money at stake in Templeton, Underwood is Chairman of Young's Market Company, a major wine and spirits distributor in California, Arizona, Oregon, Washington, and six other Western states. Presumably, he knows the industry and the rules by which it is regulated, and the antics of company president Scott Bush had become an embarrassment.

In the article, Underwood says that Templeton will bring its labels into compliance within 60 days. He also admitted that the Prohibition-era recipe claims are false and promised to build a distillery in Templeton to make the product.

Then this: "The whiskey is not the most important thing," Underwood said. "The town of Templeton is the most important thing, and the state of Iowa. The whiskey almost is the afterthought. It helps. It brings this to life."

Speaking about the label change and other misinformation disseminated by the company, Underwood said, "Currently there is some confusion. So all that confusion is going to be cleared up. If it implies that the rye whiskey is made in Templeton, then that should be changed. Anything that is misleading should be changed."

Underwood's role in the company has not so much been hidden as not widely known, although Tasting Panel reported his involvement more than a year ago in one of the fluffiest pieces of so-called journalism that you will ever read. The Des Moines Register article is the first time he has taken a lead role in speaking for the company, which currently sells about 60,000 cases of premium-priced Templeton Rye a year.

Underwood's other business, Young’s Market Company, was founded in 1888 and is one of the oldest continuously operating companies in the United States. In the 68 years since Young’s decided to engage exclusively in the sale and distribution of wine and spirits, it has grown from a relatively small local distributor servicing Southern California to the fourth largest wine and spirits distributor in the United States.

Underwood clearly knows the law and how best to manipulate it. Although federal and state laws specifically prohibit cross-ownership across tiers of the three-tier alcoholic beverage distribution system, clever owners such as Underwood have learned how to circumvent those laws. Underwood is both a producer (Templeton) and a distributor (Young's). Clearly, everything has been done legally, but it violates the law in spirit.

He is hardly alone. The Goldring family, which owns Sazerac, used to own a distribution company too, in Texas and Louisiana. The Philips (producer) and Johnson (distributor) families, a single family with two branches, do it in the upper Midwest. Again, nothing illegal about it, but it's one more example of how the way alcoholic beverages are regulated in the country is a sick joke.

NOTE: I revised the last paragraph to put the Goldring tie-up in the past tense. The Goldring family sold its interest in Republic (RNDC) about four years ago.

Thursday, August 28, 2014

Kindle Is Updating, Print Copy Is Coming Soon, Tour Deadline Is Here



If you tried to buy the Kindle version of Bourbon, Strange today (and God bless you if you did) you probably couldn't. Proofreading corrections to the print edition were incorporated into the Kindle edition and uploaded earlier today. It should clear Kindle's processing and be available tomorrow.

If you have already bought and downloaded the Kindle version (and God bless you too) you might want to download it again to get the corrections. I'm pretty sure Kindle will let you do that at no cost. Other electronic formats will be dealt with down the road. Although Kindle has apps for every e-reader except Nook (which returns the favor), some people have asked for the ePub format used by Apple's devices, so they can keep all of their books in one place and not have to bother with additional apps. I'll do what I can.

We're still a few weeks away from print edition availability. Amazon is accepting pre-orders and when they have books in stock, they will tell you. If you'd like to buy it directly from the source, just watch for it here. It will be where Bourbon, Straight is now, in the top, right corner, under 'Buy The Book.' Bourbon, Straight will continue to be available under 'The Other Books.' In fact, it's there now.

One advantage to buying it here is that you can get a personalized and signed copy at no extra charge. There is an 'inscription' field on the PayPal order form, where you should write exactly how you would like the inscription to appear. You can also use the 'special instruction' field for that purpose.

In other news, this Monday, September 1, is the deadline for joining the "Chuck Cowdery VIP Bourbon & History Tour Experience," on October 15-17. Details are here.

Part two of Mark Gillespie's WhiskyCast interview with me is here. If you missed it, part one is here.

Finally, the question 'What Is Craft?' when applied to whiskey will probably never be answered conclusively, but I take another stab at it here, on the Whisky Advocate Blog.

Tuesday, August 26, 2014

Diageo to Resume Bottling at Stitzel-Weller


Shanken reported this morning that Diageo will begin construction soon on a new bottling line at Stitzel-Weller. It is expected to be operational later this year. Bottling was done at the distillery in the Louisville suburb of Shively from its founding in 1934 until shortly after it stopped distilling in 1992. As usual, Diageo is vague about the details, saying only that Stitzel-Weller will “bottle a range of American whiskies, and will have the capabilities to handle a range of new whiskey innovations in the years to come.”

Diageo performs maturation and blending at Stitzel-Weller according to John Lunn, master distiller at Diageo's George Dickel Distillery in Tullahoma, Tennessee, who is also in charge of production at Stitzel-Weller. Diageo does not disclose what products it matures and blends at Stitzel-Weller, but it is believed that Bulleit Bourbon is matured there.

Whiskey producers typically like to bottle at the site where the whiskey ages, to avoid the cost and risk of transferring the product from barrels into totes or other containers and transporting it. Diageo does most of its bottling at a facility dedicated to that purpose in Plainfield, Illinois, a suburb of Chicago. It installed a small hand-bottling line at George Dickel last year.

This announcement comes on top of Diageo's decision to build a new Kentucky distillery in Shelby County, due to open in 2016. For several years Diageo has been developing a visitors center at Stitzel-Weller. The first phase of that project is due to open to the public this fall.

Friday, August 22, 2014

It's Time for Jim Beam to Drop the Number One Bourbon Claim


I like the Beam Suntory company very much. I like the people and most of their products.They are an outstanding operation. They do things the right way and they are very successful. They are truthful and reasonably open. They have been a leader and innovator and respectful participant in the bourbon business, and you know how much I love bourbon.

It is because I have so much respect and affection for them that I am making this suggestion.

Please stop claiming that Jim Beam is the world's #1 bourbon. It's not. You are bragging about a technicality. It's embarrassing.

As most readers can guess, I'm saying this because Jack Daniel's Tennessee Whiskey is bourbon in all but name. It is made like bourbon and tastes like bourbon. Even their acclaimed charcoal mellowing really just jump-starts the barrel aging process. It is a point of difference but not a very big one, objectively. It has more to do with marketing than with the product itself.

Jack Daniel's is the world #1 bourbon and trending toward becoming the world's #1 whiskey, spilling Johnnie Walker from that throne.

Although they were fairly close in sales for many years, Jack Daniel's has pulled away from Jim Beam decisively. Daniel's sells about 60 percent more whiskey than Beam. They're not even close. Beam is doing fine. It has grown and is growing, and is an equally dominant #2. Evan Williams is third.

As people around the world discover American whiskey they will drink Jack and Jim and find them very similar. They will ask, "what's the difference between bourbon and Tennessee whiskey?" We will sound silly when we try to explain. The least silly explanation is the truest one. It's a marketing thing. Tennessee whiskey is bourbon that's made in Tennessee. They don't call it bourbon because bourbon is so closely associated with Kentucky.

This matters because bourbon is competing for share-of-mouth against a wide variety of beverages, alcoholic and not, but it competes most directly against other whiskeys. Classifying whiskeys by their place of origin works because each country, for the most part, produces a different style of whiskey. Among whiskeys, bourbon is the most distinctive because most other nations make whiskey from malted barley in a style that inevitably resembles scotch. The other exception would be Canada, which takes elements from both the Scottish and American styles. Japanese whiskey has emerged as a distinctive style, although it is still very close to scotch. Irish whiskey still struggles to distinguish itself from scotch, which is not to say the Irish don't make fabulous whiskey.

I don't expect Jim Beam to suddenly start crowing "We're Number Two." Nor do I expect Jack Daniel's to claim its primacy, except perhaps to say it is the world's most popular American-made whiskey, which doesn't have the same zip. I just want Beam Suntory to think about it, and maybe look for something else to hang their hat on, realizing that the cat is out of the bag.

Thursday, August 21, 2014

Diageo's New Distillery to Bear Bulleit Name


Diageo held a groundbreaking ceremony today for its new Kentucky distillery in Shelby County and announced that it will make Bulleit Bourbon there. What's interesting is that the day this distillery opens, its namesake product will be selling more than its distillery can produce, based on estimates announced by Diageo.

One-hundred-fifteen million dollars just doesn't buy what it used to.

Diageo appears to be following the lead of rival Brown-Forman. Brown-Forman's Woodford Reserve has a beautiful, showcase distillery for the tourists, which makes some of the product. The rest is made in an unseen factory somewhere else.

At Brown-Forman's Jack Daniel's, tourists never see 90 percent of the warehouses. The bottling house and other functions are also hidden. They're not underground or anything, just several miles from the distillery and town proper.

Okay, it's also the Heineken model. The old brewery in Amsterdam that the tourists see produces little or nothing. The real brewery is several miles away.

The approach must work, as Woodford, Jack Daniel's and Heineken are extremely popular tourist destinations. But so is Buffalo Trace, where everything is visible and everything is made there.

There is one hitch in this theory. Diageo says the new distillery won't be open to the public. A visitors center might be built in the future, hinted Diageo North America President Larry Schwartz, but only if Shelby County voters vote the county wet. They have two years. The new distillery is supposed to open late in 2016.

In the meantime, Diageo is building a Bulleit Bourbon visitors center 40 miles away at the Stitzel-Weller Distillery in Louisville, where they make nothing. It is believed they age Bulleit Bourbon there that was made somewhere else, but they won't confirm it.

And that, dear friends, is Diageo.

Our friend Fred Minnick has a detailed report of the groundbreaking here.

Wednesday, August 20, 2014

Is Your Name Jim Beam? Let's Party!


If your name is James Beam, you may have heard that another guy named James 'Jim' Beam rather famously made whiskey a century or so ago, and one of the most popular whiskeys in the world still bears his name.

That's the premise for a party in honor of legendary bourbon distiller Jim Beam's 150th birthday. Jim Beam Bourbon is inviting anyone named Jim Beam (who is of legal drinking age) to join a once-in-a-lifetime birthday party at the historic distillery in Clermont, Kentucky on September 18, 2014 at 11AM EDT. Anyone named James 'Jim' Beam who makes the journey will be an honored guest and play a special role in the day-long festivities.

"If your name is Jim Beam, then you better get down here," said Fred Noe, Jim Beam's great-grandson and 7th Generation Master Distiller. "We want to meet you and we want to treat you to a special day in honor of a special man."

(The party is free but guests are responsible for all travel and expenses associated with the event.)

Fittingly held during National Bourbon Heritage Month and the annual Kentucky Bourbon Festival, this milestone birthday celebration will take place at the Jim Beam American Stillhouse

According to Noe, the "Jim Beams" will be treated to a VIP distillery tour, including a private BBQ lunch and the honor of helping to unveil a life-size bronze statue of Jim Beam created to commemorate his birthday.

"They're going to get VIP treatment," said Noe. "Because if they have the same name as my great-granddad, they deserve it."

Born in Bardstown, Kentucky in 1864, Beam was the fourth generation family distiller. His great-grandfather, Jacob Beam, founded the family business in the foothills of Kentucky in 1795. After learning the business from his father, David M., Jim Beam established Jim Beam Bourbon as a national brand after Prohibition.

Bourbon enthusiasts unable to make it to Kentucky need not worry. They can still raise a glass and share the Beam family legacy on Facebook at www.facebook.com/jimbeam or @JimBeam on Twitter.

Fans must be 21 years old or older to participate. For more information or to RSVP to the event, email BeamBirthday@jsha.com by Monday, September 15, 2014. Space is limited and restricted to a first-come basis. Guests not bearing the namesake are also invited to join the birthday celebration, with complimentary cake and ice cream served at the Jim Beam American Stillhouse from 11AM to 5PM EDT.

The name 'Beam' is an Americanization of the German name 'Boehm,' which was itself a shortened form of 'Bohemian,' meaning a Czech from that historical country of Central Europe. Because Bohemia was a common place of origin, Boehm and Beam are relatively common names and persons having that name aren't necessarily related, their ancestors simply all hailed from that region. All of which means there should be quite a few takers for this unusual event.

Tuesday, August 19, 2014

Buffalo Trace Addresses Rampant Rumors About Portfolio Changes


This may come under the heading of 'no good deed goes unpunished,' for them and for me, but here goes. Buffalo Trace has issued a press release to address some of the rumors that are going around. It follows but, first, a brief commentary.

Buffalo Trace makes more different bourbon and rye brands than anyone else in the business. All of those brands have increased in popularity in recent years That is mostly good -- for them and us -- but a little bit bad, because Buffalo Trace has had a worse shortage problem than anyone else in the business. They also rely on the serious bourbon enthusiast market more than anyone else in the business. And they do a better job than anyone else of showing love to that audience. That's why they take chances and put out announcements like this:

_________________

After providing a recent update to its fans about the bourbon shortage the Distillery currently faces, the rumor mill spun into overdrive as a few folks speculated on why it was difficult to find their favorite Buffalo Trace bourbons on liquor store shelves.

"Many people dismissed the warning about our bourbon shortage, speculating that this was a publicity stunt we conceived to sell more bourbon. That's simply not true. We only provided the update to consumers, retailers, and bartenders in an honest and forthright attempt to explain why bottles seem so scarce these days. Many liquor stores across the country may have empty shelves, and we felt an obligation to explain why," said Kris Comstock, bourbon marketing director.  "While we cannot speak for the bourbon industry as a whole, our bourbon shortages are a very real problem, driven by increased demand for the brands. Every single one of our bourbon brands is currently on strict allocation. While we are, and have been, making more over the last several years, bourbon takes a long time to age in oak barrels. As we wait for barrels to mature, there will be temporary periods in which bottles are hard to find."

Once people started to see empty shelves at the local store, rumors started flying. Here are some of the most popular rumors:

Rumor #1: Weller 12 Year-Old-Bourbon will be being discontinued.  False. There are no plans to discontinue Weller 12 Year. In fact, we have increased production by a considerable amount for future sales.

Rumor #2: All of the Weller Bourbon is now being shipped to Japan.  False.  None of the Weller Bourbons (Special Reserve, Old Weller Antique, 12 Year-Old, and William Larue Weller) are shipped to Japan.

Rumor #3: Buffalo Trace is shipping most of its bourbon to China and Japan. False.  While a modest amount of bourbon is sent to those markets, the quantity is very small as we ensure the overwhelming majority is made available here in the United States.

Rumor #4: Eagle Rare Bourbon is now aged only six or seven years. False.  Eagle Rare Bourbon is still aged for 10 years and there are no plans to change this. The age statement remains on the back of the bottle.

Rumor #5: Elmer T. Lee is being discontinued. False.  We have been making Elmer T. Lee Single Barrel for nearly three decades and have no plans to stop.

Rumor #6: Elmer took the recipe for his bourbon to his grave, so it will never be made again. False. Fortunately and thankfully, we have the recipe for Elmer T. Lee Bourbon and are continuing to make more.  Additionally, we have a very full archive library of samples of his favorite picks to ensure consistency for the future.

Rumor #7: Elmer T. Lee is becoming part of the Antique Collection. False.  We are very happy with our current lineup of the Antique Collection (George T. Stagg, Sazerac 18 Year, Eagle Rare 17 Year, William Larue Weller and Thomas H. Handy Sazerac) and have no plans to change this lineup or discontinue any of the offerings.  Furthermore, our Antique Collection whiskies are only released once annually and we want to offer Elmer T. Lee Single Barrel more regularly throughout the year.

Rumor #8: Buffalo Trace is taking advantage of this bourbon shortage to raise prices. False.  Our prices to our customers have and will remain relatively unchanged. We strive to offer consumers award-winning whiskey at a great value. Although a minority of stores may now be charging a premium for these limited brands, we are not asking them to do so. Our commitment to quality and pricing will remain consistent now and in the future