Bardstown Bourbon Company Gaining Steam

By Richard Thomas

The last couple of weeks saw some buzz around MGP, the Indiana distillery that produces most of the stock whiskey bought and traded among distilleries and bottlers today. Or, at least, it produced a buzz among that part of the spirits media that pays attention to the real business of making and selling whiskey. This began with an analysis produced by a short-seller, Spruce Point Capital, that the market was over-saturated with producers, which suggested bad news for a supplier of stock whiskey like MGP.

This idea that there isn’t much of a future in supplying stock to bottling companies and brand owners would come as surprising (and rude) news to Bardstown Bourbon Company (BBCo). Business is booming for this distilling company, and their business model is designed to essentially out-do MGP by providing added value, beyond merely supplying sourced whiskey. After going operational a mere four months ago, BBCo is already working on an expansion designed to double their output, up to 3 million proof gallons a year.

Taking Sourced Whiskey Up A Step
While BBCo has the intent to introduce their own brands down the road, much of what they are doing now is providing contract spirits production to outside brands. They opened with a dozen clients, a mix of bottled brands in search of a stable supply of sourced whiskey and micro-distillers looking for a cheaper alternative to investing in new equipment and expanding production.

A new customer is Western Spirits Beverage Company, best known as the makers of the Bird Dog flavored whiskey line. They started as customers of BBCo’s Collaborative Distilling Program last month.

They had so much business from the outset, in fact, that BBCo started running at almost full capacity shortly after opening. Hence, the major expansion only four months into operations (one wonders if Spruce Point Capital knew this when they made their analysis!).

All That Whiskey
Steering the helm of production at BBCo is Steve Nally, the consulting Master Distiller formerly of Maker’s Mark and Wyoming Whiskey. Working with and under Nally is Larry Ebersold, formerly of MGP and who also served as consulting Master Distiller for northern Kentucky’s New Riff and is working on the Rabbit Hole Distillery in Louisville.

To date, Nally and Ebersold have developed a handful of production mash bills: an MGP-style 95% rye; a 100% malted rye; both low-rye and high-rye Bourbons; and a wheated Bourbon. In November, they were turning out 125 barrels a day from a 50-foot column still from Vendome, heated by boilers made by Sellers.

A Little West Coast In Bourbon Country?
As you drive into the old heart of Kentucky Bourbon country in Bardstown on the Bluegrass Parkway, the BBCo plant jumps out at you. It’s a striking modernist facility, plainly visible from the highway. Thus far, only the aforementioned New Riff has a similarly stylish presence, and that appearance is no accident. David Mandell, President of BBCo, often describes the company’s goal as to provide a “Napa Valley experience.”

With its verandas and fire pits, the BBCo’s 100 acre property will very likely look like a slice of California wine country in the Bluegrass after the spring grass comes in. The main thing that might tell you otherwise is the rickhouse, whose similar modern design contrasts even more sharply with Bourbon country’s norms, where most of those structures are utilitarian buildings of tin, wood or brick. The current warehouse is already roughly one-third full, with 7,000 barrels in it. A second warehouse is under construction, and should be finished by summer.

Another thing that should be finished by summer is the public, tourist side of the facility. In addition to providing a physical home for products like Bird Dog, the distillery will have a chic bar with a deep whiskey library and offer a range of classes with a largely technical focus.

What Next?
Contrary to what some analysts think, the near future should be stable for suppliers of stock whiskey. Constellation Brands, a drinks giant and the world’s largest wine producer, certainly thinks so. They bought a stake in BBCo in October, just weeks after they went operational. Those folks know this business as well as anyone, and that is a strong vote of confidence that the market for stock whiskey can support more players than just MGP.