Each week, we bring you the latest whisky news on WhiskyCast, but a lot can happen during the week. Now, you can keep up with whisky news as it happens here on WhiskyCast.com!
July 1, 2015 – Diageo Chief Financial Officer Deirdre Mahlan has been named as the drinks giant’s new North American president following the announcement last month that current president Larry Schwartz will retire later this year. Mahlan will relocate from the company’s London headquarters to New York once her successor is in place. She previously served as the North American unit’s CFO during a stint in New York lasting from 2002 through 2007, and moved through senior roles as the company’s head of tax and treasury issues and Deputy CFO before being promoted to her current role in 2010.
In a news release, Diageo CEO Ivan Menezes made the announcement as one in a series of organizational changes for the North American unit. “Deirdre has been an exceptional CFO and has the skills, together with experience of the market, to lead the next stage of growth in North America,” he said.
June 29, 2015 – A legal battle lasting more than two years over supplies of bulk whiskey for the former Michael Collins Irish Whiskey brand has ended with both sides declaring a draw. In a motion filed Friday in US District Court in New York, Sidney Frank Importing Company and Beam Suntory jointly dismissed the suit filed by Sidney Frank on March 1, 2013 seeking $100 million in damages. The move came three days after Sidney Frank agreed to be acquired by Mast-Jägermeister, the German-based producer of Jägermeister liqueur, for an undisclosed amount. The two companies had been closely aligned for 40 years, as the late Sidney Frank was responsible for introducing Jägermeister to the United States as its importer and distributor in 1974.
That lawsuit was filed after Beam started limiting bulk whiskey sales from Ireland’s Cooley Distillery following its deal with Cooley’s owners to acquire the company in late 2012. Under John Teeling’s leadership, Cooley generated income by selling whiskey in bulk to independent bottlers like Sidney Frank, which built the Michael Collins brand based on having a long-term supply of whiskey from Cooley. Beam executives decided after acquiring Cooley to stop the practice and use Cooley’s production to build up its Kilbeggan, Tyrconnell, and Connemara brands instead. In the original lawsuit, lawyers for Sidney Frank claimed Beam tried to undermine its relationships with distributors by telling them that “Michael Collins is going away.” The brand was named for the Irish revolutionary leader, and Sidney Frank was forced to withdraw it from the market after being unable to replace the whiskey supply from Cooley.
The case never reached the trial stage, with Beam fighting vigorously against the Sidney Frank claims to the point of seeking legal authority in Ireland to compel former Michael Collins brand manager Abaigeal Hendron to testify in the case as recently as last month. No reason was given in the filing for the joint motion to dismiss the case, and each party will be responsible for its own legal fees and costs. A Beam Suntory spokesman declined to give more specifics beyond a news release announcing the withdrawal of the lawsuit, and executives at Sidney Frank have not returned our requests for more information.
This story will be updated as necessary.
June 29, 2015 – Tomatin is releasing a new 36-year-old single malt from the distillery near Inverness, with just 800 bottles in the initial batch. The new expression will be available worldwide with a recommended retail price of £499.99 ($789 USD) when it hits retailers later this month.
The Tomatin 36 Year Old will replace the distillery’s 30-year-old expression, which was discontinued earlier this year. While the initial batch will have just 800 numbered bottles, the distillery has enough stock of older whisky available to make it available on an ongoing basis, according to sales director Stephen Bremner. The whisky is tatted from a combination of Oloroso Sherry and ex-Bourbon casks, and is bottled at 46% ABV with no chill-filtering or caramel coloring.
Tasting notes will be available at a later date.
June 29, 2015 – Scotch Whisky Association CEO David Frost and his predecessor, Sir Gavin Hewitt, both came to the association following service in the UK Diplomatic Service, so it comes as little surprise that Frost and the SWA’s directors would select another diplomat to head up the association’s new London office. Ambassador Sarah Dickson will join the association once she wraps up her service as the Queen’s Ambassador to Guatemala and Honduras.
As Director of Global Affairs, Dickson will be responsible for the association’s lobbying efforts on trade and taxation worldwide. Her speciality is European and Latin American affairs, and she served at the UK’s embassies in Spain, Argentina, and Serbia before being appointed to her current post.
In addition, Graeme Littlejohn has been named to head up the London office’s external affairs unit with responsibility for relationships with the UK Government and Parliament. Littlejohn was chief of staff for former MP and Chief Secretary to the Treasury Danny Alexander. Trade policy manager Helena Mumdzjana will move from the SWA’s Edinburgh headquarters to London, and the association is hiring additional trade and regulation analysts to staff the London office when it opens next month.
In a news release, Frost and his colleagues repeated their intention to keep the Association’s headquarters in Edinburgh. Plans are in the works to move from the longtime office in Atholl Crescent to new offices in Edinburgh’s Quartermile development later this summer.
Links: Scotch Whisky Association
June 28, 2015 – While the exact timetable hasn’t been set, Heaven Hill is planning the third phase in its expansion of the Bernheim Distillery in Louisville in the past seven years. The second phase completed in 2014 added four new fermenters and brought the distillery’s capacity to 300,000 barrels a year, which is equal to 19.8 million gallons based on 66 proof gallons per standard barrel. The next phase is expected to double that capacity, according to Denny Potter, who doubles as Bernheim’s manager as well as Heaven Hill’s co-master distiller. That phase is expected to include new mash tuns, an additional column still and “doubler” style pot still, and will require expanding the current distillery building into the facility’s parking lot.
Heaven Hill acquired the distillery in 1999 from Diageo following the 1996 fire that destroyed Heaven Hill’s original distillery in Bardstown. Spirit distilled at Bernheim is taken by tanker truck to the company’s Bardstown campus for filling into barrels and maturation in the warehouses Heaven Hill owns around the region, as well as blending, bottling and distribution once the whiskey is ready. The Bernheim expansion will require additional work at the Bardstown campus, according to Heaven Hill CEO Max Shapira. “Of course, that means you’d have to build additional warehouses for stock,” he said, noting that the family-owned company already has nearly 1.2 million barrels of whiskey aging in its warehouses and that may not be enough to meet future demand.
“It’s almost – not quite 25 percent of the world’s supply, and frankly, we don’t know if we’ve got enough. It’s a difficult thing…the category is exploding both domestically and around the world…and as I say, despite the growth we’ve had, if you go anywhere around the world…you could be in Buenos Aires, Sydney, Australia, London, England, or wherever…if you go to your hotel bar or restaurant or whatever and ask for a whiskey and water or whatever, 99 times out of 100 you’re likely to get Scotch. Great product, Scotch is…no question about it, but all we have to do to turn that 99 times out of 100 into 96 times out of 100…Scotch people will continue to do great, but we won’t have enough whiskey to satisfy that demand for a long time to come.”
Heaven Hill CEO Max Shapira
In fact, there are already signs that the industry may not be satisfying the global demand. US Customs Service data for March (the most recent month available) shows a decline of 5.5% in Bourbon and Tennessee Whiskey exports from March of 2014, while exports of other American whiskies (mostly flavored and non-Bourbon craft whiskies) nearly doubled from 241,555 proof gallons to 428,479 (a 92.6% increase). The report released by the Distilled Spirits Council of the United States shows Bourbon and Tennessee Whiskey exports in March of this year totaled 3,225,230 proof gallons, compared to 3,271,432 in the same month during 2014. Exports of Bourbon and Tennessee Whiskey to the UK, France, Germany, Japan, The Netherlands, South Africa, South Korea, and Singapore all declined during the first quarter of 2015 compared to the previous year. Exports to Australia, New Zealand, and Spain showed gains during the quarter.
Last month, Heaven Hill was forced to change the usual distribution pattern for its Evan Williams Single Barrel Bourbon, which is distilled at Bernheim along with all of Heaven Hill’s other whiskies. Traditionally, each annual release came from whiskey distilled around 10 years earlier, including the release of the 2005 Vintage earlier this year. However, a combination of high demand and short supplies of the 2005 whiskey forced the company to release the 2006 Vintage in May – about seven months earlier than usual, and company officials admit that the move will have an impact on the long-term plans for the brand while not providing any specifics on future releases.
While the next Bernheim expansion will take up a significant portion of the facility’s parking lot, the distillery is landlocked to a certain extent. It’s located in a mixed neighborhood of residential and industrial use, and is bordered to the west by Brown-Forman’s Dixie Highway distillery and corporate headquarters, homes to the south, other industrial use on the north and maturation warehouses on the east side. That would appear to make future significant expansion of the distillery difficult, but Shapira said there are no plans at the time to build a new distillery on the Bardstown campus while admitting that “anything’s possible.”
June 25, 2015 – Two months after the Silver Trail Distillery explosion that left him with severe burns and claimed the life of his cousin, Jay Rogers is back at home to continue his recovery. Rogers was released from Vanderbilt University Medical Center in Nashville, Tennessee, where he and Kyle Rogers were flown for treatment after the April 24 explosion that leveled the distillery. In a Silver Trail Facebook post, Jay was shown waving from the car as he and his fiancee Tiffany headed back to Hardin, Kentucky. The two became engaged while Rogers was hospitalized, prompting a colleague to post this on the distillery’s Facebook page: “Jay’s the only guy I know that goes to the hospital and comes out with a fiance. Congratulations you two!”
Rogers underwent more than a dozen surgeries to treat his injuries from the explosion, which splashed the two men with mash heated to around 204ºF. Kyle Rogers died at Vanderbilt 17 days later from a bacterial infection that doctors were unable to fight.
The Kentucky Fire Marshal’s office has still not released its final report on the explosion, but the investigation is focusing on what Silver Trail founder Spencer Balentine has described as a failure of a key component in the still, which was built by Revenoor Stills in Yamhill, Oregon. Investigators have declined to comment on their probe until the final report is released. Balentine and Rogers have already filed a lawsuit against Revenoor and owner Terry Wilhelm.
Rogers’ homecoming comes as Silver Trail resumed distilling for the first time since the explosion. While the distillery in Hardin has not been rebuilt, Balentine has worked out an agreement with Paul and Mary Beth Tomaszewski of the M.B. Roland Distillery in Pembroke to use their distillery until Silver Trail can be rebuilt. Balentine has already promoted Jay Rogers to Master Distiller for Silver Trail – as soon as he’s able to return to work.
Editor’s note: This story was updated to correct the names of Paul and Mary Beth Tomaszewski of M.B. Roland Distillery. We regret the error.
June 25, 2015 – Pikesville Rye’s heritage dates back to 1895, when it was originally distilled in Maryland, and even though the whiskey has been distilled in Kentucky since Heaven Hill acquired the brand in 1982, it remains a staple in Maryland and neighboring states. In fact, when rumors started spreading about Heaven Hill’s plans to create a new version of Pikesville Rye and distribute it nationally, the brand’s local fans pleaded with Heaven Hill to keep their original version available. While that 3-year-old, 40% ABV (80º proof) version will still be available in the Mid-Atlantic region, the new Pikesville Rye made its debut at a tasting in New York City last night.
“Obviously, we wanted it to be a little bit older, but not too old…and then on the proof side, we experimented a little bit, but we already have a bottled in bond Rye with Rittenhouse,” Heaven Hill Co-Master Distiller Denny Potter said in an interview. “We already have a lot of products that are cask-strength or barrel proof, but nobody’s really done anything in between and figure out how versatile that liquid could be.” Potter was tasked with coming up with the recipe using Heaven Hill’s inventory of nearly 1.2 million barrels of whiskey, and settled on a 55% ABV (110º proof), six-year-old vatting of barrels selected from the top two floors of Heaven Hill’s warehouses.
The Pikesville Rye project is Potter’s first release since being named Co-Master Distiller alongside Craig Beam in December, and he worked extensively with Craig and Master Distiller Emeritus Parker Beam on the whiskey. He joined Heaven Hill two years ago to manage the Bernheim Distillery in Louisville after a long career at Beam Suntory, and is the first person outside the Beam family tree to serve as one of Heaven Hill’s master distillers. “Obviously, what went into the barrel is a credit to them and their ideas, but at the same time, a lot happens during maturation and then you come in and get the opportunity to select what they put into the barrel years ago.”
While Potter is getting much of the credit for the final whiskey, the plans were set in motion several years ago by Heaven Hill CEO Max Shapira. “We had this iconic brand that dates back from 1895 in our portfolio…it was really for many, many years just a stepchild, frankly,” Shapira said in an interview. “We thought, gosh…this is a real gem going all the way back to 1895, so it has all the authenticity, the history, the heritage that you’d ever want or hope to have.” Shapiro points out that Heaven Hill never stopped producing the original version of Pikesville Rye, even when Rye whiskey was completely out of favor with consumers, and notes that publicly-traded spirits companies with shareholders and Wall Street to answer to would have quietly killed off the brand years ago. “There just wasn’t much volume, but it was iconic and we just weren’t going to do that to a brand with this kind of interesting history to it, so we hung around and stayed around with it, and fooled with it for all this time, and now the time has come for a real, live relaunch.” While Heaven Hill’s flagship Evan Williams Bourbon traces its name to 1783 and the real Evan Williams in Louisville, Shapira acknowledges Pikesville Rye may actually be the oldest brand in the company’s entire portfolio, and was one of the few whiskies produced during Prohibition (for “medicinal purposes”).
Pikesville Rye will initially be available in New York City, Chicago, San Francisco, and Los Angeles this summer and later this year throughout the US in limited quantities with a recommended retail price of $49.99 (750ml).
June 18, 2015 – Japan’s Nikka Whisky has now confirmed plans to replace its entire range of single malts from the Yoichi and Miyagikyo distilleries worldwide over the next year with new versions that will not carry age statements. The plans have been reported in recent days by several news organizations and the Nonjatta Japanese whisky blog, and will affect whiskies now being sold around the world.
In an email, Nikka Whisky International Sales and Marketing head Emiko Kaji explained that the company’s importers in various countries are being told of the plan now. She noted the current range will continue to be available while stocks exist, but new Yoichi and Miyagikyo expressions will debut in Japan starting in September with a global rollout planned during 2016. Kaji provided WhiskyCast with a copy of the letter being sent to importers, which cites the growing global interest in Japanese whisky and a shortage of aged malt whisky stocks available to bottle.
“With the current depletion, Yoichi and Miyagikyo malt whiskies, which are the base of most of our products, will be exhausted in the future and we will be unable to continue the business. Although we are now distilling spirits at full capacity, a long maturation period will be required until the spirits can be sold.”
The decision affects the current Yoichi 10, 12, 15, and 20 year old single malts along with the current no-age-statement expression. The Miyagikyo 10, 12, 15, and the current no-age statement version are also being discontinued, along with the Nikka Pure White, Tsuru 17-year-old, Nikka Black 8-year-old, G&G White, and Malt Club bottlings sold mostly in Japan. Other Nikka expressions, including its Coffey Grain whiskies, Super Nikka, and Nikka From the Barrel will continue to be available, though price increases are expected throughout the lineup.
Nikka began exporting its malts to the US in 2012 through a partnership with San Francisco-based Anchor Distilling, and recently added a no-age-statement version of its Taketsuru Pure Malt to the US lineup.
Nikka is not the only Japanese distiller experiencing shortages of aged malt whisky. Beam Suntory executives have also acknowledged shortages of whisky from the Yamazaki and Hakushu distilleries. In an interview earlier this year, Suntory Holdings CEO Takeshi Niinami admitted that he has banned his executives from drinking Hakushu 15 and other Suntory single malts in order to make more bottles available for consumers. The company’s Chris Bauder said in February that a no-age-statement version of the Hibiki blend would reach the market in July. Bauder has since left the company, according to a Beam Suntory spokesman. However, the plans remain in place for the Hibiki Japanese Harmony to make its debut at an event in New York City later this month.
Editor’s note: This story was updated with details on Chris Bauder’s departure from Beam Suntory and to add a link to the PDF file of Nikka’s letter to importers.
Updated June 22, 2015 – Here’s a roundup of key executive changes and moves within the whisky industry announced over the last several days:
Beam Suntory: Chris Bauder has left the company after serving as General Manager for Whiskies and Cognacs, and a Beam Suntory spokesman says Bauder made a personal decision to move to a company outside the spirits industry. Bauder was the keynote speaker at the World Whiskies & Spirits Conference in February, and spoke extensively about the global boom in Bourbon sales. He is a former executive with S.C. Johnson & Son, and no successor has been named yet.
William Grant & Sons: Former Diageo marketing director Philip Gladman has been named chief marketing officer for the family-owned drinks company, which owns Glenfiddich, The Balvenie, the Grant’s Blended Scotch, Drambuie, and other brands. Gladman was with Diageo for 14 years before setting up a consulting firm last year, and will oversee Grant’s global travel retail business in addition to his marketing responsibilities. He replaces Maurice Doyle, who has left the company with no word on his future plans.
Diageo: Diageo North America president Larry Schwartz announced his plans to retire at the end of the year. The announcement came Monday as Schwartz celebrated his 40th anniversary in the spirits business. Schwartz was influential in the company’s recent renewed focus on American whiskey brands, including the development of Orphan Barrel and Blade and Bow, along with the decision to build a new Bulleit distillery in Kentucky. CEO Ivan Menezes said in a news release that Schwartz’s successor will be named later this year. In addition, Diageo Australia managing director Tim Salt will leave the company at the end of June for personal reasons. Salt has led the drinks giant’s Australian operations since 2008.
Edrington Americas: CEO Paul Ross has announced a major shakeup in the unit’s executive lineup. Christopher Spalding was named Senior Vice President and Commercial Director after serving as the unit’s Northeast Division Manager, while Jim Brennan has been promoted to Senior Vice President and Marketing Director. Brennan joined Edrington Americas last year as VP of Marketing after working on the company’s brands when they were distributed by Rémy Cointreau USA. Former Bacardi North America CFO Michael Misiorski has joined the company as Executive Vice President and CFO after leaving a similar role at Stoli Group USA. Juan Gentile has been named Vice President and Regional Director for the unit’s Latin America and Travel Retail operations, while Tracy Genesen is the new General Counsel and Nadege Dethy will head up Human Resources.
Uisge Source: The Scotland-based producer and distributor of bottled spring water for whisky connoisseurs has named Blair Bowman as its international business development manager, with a special emphasis on the Asia-Pacific region. Bowman sold his World Whisky Day brand to Edinburgh-based White Light Media earlier this year.
Editor’s note: This story was updated to include details on Chris Bauder and Philip Gladman.
June 11, 2015 – Deutsch Family Wine & Spirits’ acquisition this week of Bardstown Barrel Selections is just the beginning for the family-owned company, which wants to become a key player in the whisky market. “We are really bullish on American whiskey,” Deutsch president Tom Steffanci said in a telephone interview. “We look at vodka having been a 30-year trend…and we think we’re in the early stages of a 30-year plus trend in American whiskey.” Steffanci also noted the increased consumer interest in the provenance and variety of the spirits they buy, especially as more whisky labels note specific mashbills, barrel types, and the like.
Bardstown Barrel Selections, which was founded by Dave Schmier and Michael Kanbar in 2010 to bottle Redemption Rye, is the company’s first major acquisition in the whisky sector following a failed experiment with Original Moonshine beginning in 2011. “The view at the time was…could we do with white whiskey or moonshine what Patron did with their Plata…could we come out with a really good product and price it at a really premium price and create a new segment…we had a lot of success in getting distribution, but in terms of the consumer takeaway, it didn’t measure up to what we had hoped,” Steffanci said. The brand is under new ownership and now is known as Stillhouse Original Moonshine, but Steffanci notes that the experiment taught them several lessons that will carry over as Deutsch begins to market Redemption Rye. “We’re really good students, and we’re pretty humble about learning as we go.” While not revealing the price Deutsch paid for Redemption, Steffanci admits that the company paid a premium because of the demand for good American whiskey brands.
The company spent more than two years looking at deals before pulling the trigger on the Redemption Rye acquisition. “We had a list of criteria that starts with quality, then it runs to scalability…can we grow the thing and maintain the quality, does the brand have the right prices and the right offerings, does it have trade credibility…so do mixologists and aficionados feel like this is something worth their admiration,” Steffanci said. The final item on the list was what he calls the “trademark Deutsch element” – delivering quality for the price. “Everything that we do checks that box, and it’s real important to us that we’re going to be able to deliver something where the consumer gets real value.”
Bardstown Barrel Selections sources all of its whiskey from the MGP-I Distillery in Lawrenceburg, Indiana, and Deutsch has already completed a long-term supply agreement with the distillery. While stocks will be in short supply for the next two years, the company plans to make the Redemption range available nationwide over that point. While some critics have been harsh on brands that rely on MGP-I’s standard recipes, the Redemption whiskies bottled by Schmier and Kandar have won awards in major US whisky competitions and Steffanci notes that the distillery’s quality and efficiency is key to his goal of keeping Redemption priced at around $30 per bottle.
“The most important thing is that they understand what we’ve been doing,” Dave Schmier said in a telephone interview. “The company has always just been simply about good whisky at a fair price and getting out there and telling the story,” Schmier said, adding that Deutsch has the financial capacity to expand Redemption to a scale that he and Kandar would never be able to accomplish. The two will work with Deutsch for at least the next year during the transition, and the whiskies will continue to be bottled at Kandar’s Strong Spirits bottling plant in Bardstown, Kentucky for the foreseeable future.
As for future acquisitions, Steffanci is open to exploring deals with “grain to bottle’ craft distillers, but wants to avoid creating internal competition with the Redemption range by adding more Rye or high-rye Bourbon brands to the portfolio. He believes there are still wide-open possibilities in the American Whiskey segment that Deutsch could enter, and is equally bullish on the Irish Whiskey market because of the company’s emphasis on value. “We really want to be able to bring things to a wide base of consumers,” he said. The company generally prefers to own equity in brands and trademarks, but does handle US distribution for Pernod Ricard-owned Luksusowa Vodka. Steffanci admits to a current fascination with Japanese whiskies, and “if the right opportunity were available, that might be available to sort out under any terms.”