The small batch, craft bourbon industry that has taken the whole country by storm over the last couple of years has a dirty little secret. Or rather, make that a big dirty secret. Despite the homegrown marketing of many bourbon brands, a significant number of the nation’s small batch distillers of brown liquor – that’s bourbon, whiskey and rye – outsource their production to a pair of industrial distillation facilities in Indiana and Kentucky.
Like so many other adjectives smattered across products in the grocery store, it turns out that words like artisanal, hand-crafted, and small batch are largely unregulated terms dreamed up by marketing departments to sell, sell, sell.
Ten years ago, there were just 100 or so craft distillers in the U.S. Today, that number has swelled to more than 1,400. But making bourbon takes time, and lots of it. So how does a young company break into a business where the signature product can take six to ten years to produce? By outsourcing the production, or even just outright purchasing existing product from suppliers like Lawrenceburg, Indiana’s MGP (Midwest Grain Products). The company’s website features dozens of formulations of gin, whiskey and bourbon, as well as neutral grain spirits that are pre-distilled and ready for purchase.
Brands like Bulleit, Templeton, Rancho de Los Luceros Destilaría, Ascendent Spirits, and High West buy these bulk recipes, and then sell the product as their own – which, sure, technically is true. But while the letter of the law is being adhered to by these companies, is the spirit of consumer trust also being taken seriously?
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So how can you tell if your favorite “small batch” bottle is really being aged in one of the world’s biggest production facilities in Indiana? There are three things to pay careful attention to.
The first is the specific language used to describe the relationship between the contents of the bottle and the company you’re buying it from. Does the label say “distilled by” or “bottled by?” If it’s the latter, you’re likely holding a bottle of mass-produced booze. Be on the lookout for companies that attempt to cleverly sidestep the issue altogether by saying “produced by,” which could mean either.
The second thing – specifically if you’re buying rye whiskey, not bourbon – is to be on the lookout for is the actual recipe. MGP is relatively unique among the industry in selling a product made from 95% rye. If the label specifically touts that percentage of the grain, your bottle’s contents may have been made in one of MGP’s vats in Indiana.
The final way to tell whether or not your artisanal bourbon is being produced by actual artisans is to bust out your thinking cap and do a little third grade math. New Mexico’s KGB Spirits’ flagship product is Ceran St. Vrain, a rye barrel-aged for 15 years. There’s just one thing though: the company was founded in 2009. How does a nine-year-old company produce a 15-year-old rye? It doesn’t.
But therein lies a path toward eventual transparency in the industry. Not all of the brands who outsource production to MGP continue to outsource their entire portfolio of products. Buying from a mass distiller can be an effective way of launching a business, giving you product to sell for those first four, six or even ten years while the product you create yourself ages. But companies pursuing this strategy run the risk of not being able to wean themselves off the sauce down the road once their brand loyalists come to expect their favorite whiskey to taste a certain way.
All of this isn’t to say that MGP is producing a portfolio of inferior products by any means. Some of the biggest names in distilling praise the capabilities and quality of the distiller. But that doesn’t mean that the marketing over manufacturing style of doing business sits well with everyone. Lawyer Steve Ury long maintained an exhaustive list of all the American artisanal alcohol brands that were actually outsourcing production to MGP. When the list eventually grew too long to maintain – there’s that 100 to 1,400 distilleries in a decade for you – he began focusing his attention on lobbying the federal Alcohol and Tobacco Tax and Trade Bureau to more forcibly regulate requirements that would tell consumers exactly who was actually making their favorite booze. As the number of U.S. alcohol brands continues to grow year after year, so too will the call for greater regulation.
