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Tuesday
Jan142014

The "Kentucky" Bourbon Industry

My buddy Chuck Cowdery wrote something very poignant yesterday concerning the Suntory buyout of Beam:

"The reality is that there is no bourbon industry. There is a worldwide distilled spirits industry, in which bourbon whiskey is one product category. Ultimately, everyone will sell everything everywhere and it may not really matter where the corporate headquarters is located."

I did my share of internet perusal after the news was announced and there was the typical knee-jerk backlash about "this bottle of Maker's Mark" being someone's last and whatnot. The fact that Beam was no longer in "American hands" was an outrage and a travesty. As someone who works for a local business, I'm all for people wanting to support their neighbors and their fellow nationals. I make an effort to do so myself. However, Beam wasn't some tiny American enterprise catering solely to the domestic market. Beam was an American company in possession of its own foreign distilleries, focused intently on the global picture. They owned Laphroaig and Ardmore in Scotland. Cooley distillery in Ireland. The famed French Cognac house of Courvoisier. The Sauza and El Tesoro Tequilas in Mexico. Can you imagine how the people on Islay felt when Bowmore went to Japan? When Laphroaig went to the Americans? How excited they were about Bruichladdich until it took the French corporate money and never looked back? Like Chuck said, there's no such thing as a Scotch or Bourbon industry anymore -- they're simply categories in an overall global portfolio.

But all romanticism and ideology aside, is anyone going to argue that Kirin wasn't the best thing to ever happen to Four Roses? Seagram's, a longstanding North American stalwart, had completely butchered the brand, turning it into the laughing stock of the blended liquor shelf. Jim Rutledge--one of the most red-blooded Kentucky guys I've ever met--thanks his lucky stars every day that Kirin took over the operations. It allowed him to get back to doing what he did best: making traditional American Bourbon. If you talk to Jimmy and Eddy Russell, they're overjoyed that Italian giant Campari decided to jump in, buy the brand, and build them a brand new, state-of-the-art distillery (one that Rutledge himself is envious of). Suntory is a company that values tradition and history as highly as their global revenue. I don't see too many changes in store for Jim Beam, especially considering they've been representing Beam in Japan for years (many brands import foreign companies without owning them, i.e. Remy's representation of Edrington's Macallan and Highland Park here in the U.S.).

The global market is a scary place, but it's the reality of today's spirits industry. Because of the internet and the ability to spread information easily, many of us enthusiasts are aware that other countries are in possession of some rather fine booze. That helps to create a global demand for even the most esoteric of products. Look at the American fascination for unavailable Japanese malts, or the Parisian interest in American Bourbon. Or like when David Hasselhoff's PR team told him he was going to tour Germany as a singer. "Germany?" I imagine he asked. "Dude, you're HUGE there. They'll pay to see you." they told him. Those in search of greater revenue will always seek to expand their market abroad. The demand for fine spirits has become a global phenomenon; hence, why the business itself is no longer a local one, but a global pursuit as well.

Which Kentucky "Bourbon" companies are left? Brown-Foreman: the publically-traded, NYSE company that owns Jack Daniels, Woodford, and Old Forester, but also the French liqueur producer Chambord, Canadian Mist, and the Mexican tequila Herradura. Sazerac: the owner of Buffalo Trace, Barton, and Bowman, headquarted in Louisiana, which also owns the Mexican tequila Siete Leguas, Caribou Crossing Canadian whiskey, and Tortuga rum--distilled on the Cayman Islands. And who could forget the family-owned Heaven Hill company as well: owners of Evan Williams and Elijah Craig, as well as the legendary French aperitif Dubonnet, Ansac Cognac, Arandas tequila, and the Brazilian cachaça Agua Luca.

Of course, there's the up-and-running Willett distillery. They only make Kentucky whiskey, but none of it will be available any time soon.

-David Driscoll