The New MGP Whiskeys
Five years ago, the trend was for companies selling MGP to pretend it was anything but whiskey made in a giant factory in Indiana. Now, there's a new trend, bottles that proudly proclaim their MGP status and sell for a premium. I'm thinking of Mic Drop, Joseph Magnus and more. So what gives? Here's a little history of how we got here.
Seagram's to LDI to MGP
The Lawrenceburg Indiana distillery was once part of the Seagram's empire, which also included Four Roses. In 2000, when Seagram's broke up, the Lawrenceburg Indiana distillery was sold to Pernod Ricard who then sold it to CL Financial in 2006. Back then it was known as Lawrenceburg DIstillers Indiana (LDI) and produced only three whiskeys – two bourbons and a rye. CL Financial, the Trinidad based parent company to Angostura, fell on hard times, and in 2011, it sold the distillery to Midwest Grain Products (MGP), a large industrial distiller based in Kansas. In 2013, MGP began introducing new mashbills. Currently, they make 12 different whiskeys including five bourbons, three ryes, a wheat whiskey, a corn whiskey, a malt whiskey and a light whiskey.
A Mystery Whiskey
LDI first came to attention in the whiskey world around ten years ago when companies like Templeton and High West started selling rye whiskey with an unusual mashbill – 95% rye and 5% barley. This was quite mysterious to those of us who were used to the ryes on the market, nearly all from Kentucky. Kentucky ryes were mostly around 51% rye with a large amount of corn in the mashbill (this was in the days before Whistlepig and others brought us bottles of Canadian 100% rye). Eventually, intrepid whiskey writers like Chuck Cowdery and Mark Gillespie were able to discover that these came from what was then LDI. Why were they holding onto well aged 95% rye? Most of it was likely made to go into Seagram's 7 blended whiskey.
The major thing that separated LDI/MGP from every other major whiskey distillery in the US is that they didn't have any of their own brands. In fact, when MGP purchased the distillery, they didn't even buy the bottling plant; that went to Proximo, so MGP doesn't even have the ability to bottle their own whiskey at the plant. Eventually, MGP would release some house brands under the Metze's and George Remus labels, but the vast majority of their business is still in sales to other companies.
The First Wave
Once the rye was out of the bag, all kinds of companies started buying it – many marketed it as if they had made it themselves. This caused a scandal after a Daily Beast expose in 2014 that led to numerous lawsuits. Most of them were unsuccessful, a few settled, but the whole episode did much to make consumers aware that not all whiskey was what it claimed to be.
A New Wave
A few companies like High West and Redemption were always honest about their use of LDI/MGP whiskey, and Smooth Ambler and Willett started selling single barrel, cask strength Indiana whiskey. These bottlings became highly sought after – partly because of the general bourbon craze, but also because MGP makes good whiskey and both Willett and Smooth Ambler were picking good casks (as did Nelson's Green Brier for their Belle Meade Bourbon). Others took note and "Distilled in Indiana" started to appear in bigger letters on some labels, with some even using "MGP" on the label, including the boutique bottlings from Single Cask Nation and PM Spirits' Mic Drop.
The Price Factor
One issue with MGP bourbons is that they tend to be more expensive than similarly situated Kentucky bourbons. Why? Some of it is probably your typical effort to make big bucks off of the bourbon craze, but Non Distiller Producer whiskey also has more mark ups attached to it than distiller produced whiskey.
Every time a cask of whiskey changes hands, there's a mark-up so that whoever it changes hand with can make a profit. When Heaven Hill makes a bottle of Elijah Craig, it distills the whiskey, ages it, bottles it and then sells it to a distributor that sells it to a retailer. That's two mark-ups from distillery to retailer.
When a whiskey is sold by someone other than the distiller, it's more complicated. There's at least one additional step involved and often more. In some cases, there are as many as three transactions before an MGP whiskey even gets to the distributor, and each transaction includes a mark-up that's passed on to the consumer.
What Comes Next?
The trend toward honesty and transparency among MGP bottlers is definitely a positive, the trend of higher prices not so much. That being said, MGP is making excellent whiskey, and it will be interesting to taste their newer recipes when they get some age on them. Those include some pretty unusual mashbills; there's one 99% corn bourbon and another that's 51% corn/49% barley (would we call that a "Barleyer"?). Those will likely make for some interesting drinking in another four or five years, so stay tuned.