How do you choose between your kids? You love them all equally right? It’s a tough choice but at the end of the day somebody’s gotta do it. That’s about the conversation that recently occurred at Michter’s Distillery as the demand for their bourbon has outstripped supply and they had to choose one bourbon over another. I recently had the opportunity to sit down with Michter’s President Joe Magliocco at the company’s headquarters in Louisville, Kentucky to discuss the shortage.
It comes down to simple math as Joe explained, “One more bottle of US*1 Toasted Bourbon is one less bottle of US*1 Bourbon.” Michter’s launched their limited edition US*1 Toasted Barrel Finish Bourbon in 2014 to much acclaim. The Toasted Barrel Finish bourbon is the regular US*1 Bourbon with one additional step added. Michter’s takes their regular bourbon out of its original barrel and pours it into a second new oak barrel for finishing. The second barrel uses 18 month old air dried oak that has been toasted, not charred. The barrel is toasted over an open flame using some of its own wood for approximately 55 minutes at 400 to 500 degrees. The bourbon is then placed in the second barrel for a few days for finishing. The actual number of days will vary until the bourbon tastes the way they want it, generally fewer than 30 days. Master Distiller Willie Pratt said this process is often used in wine barrels.
Please Choose One
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Why Not Just Ship the Limited Edition Bourbon?
At first glance, you would think Michter’s would want to ship the harder to find “Limited Edition” rather than the standard bourbon but, as Joe pointed out, it’s not that simple. “We have a lot of great accounts that are used to featuring our US*1 Bourbon. Literally, every bottle of that (US*1 Toasted Bourbon) is one less bottle that we have for a Four Season or a Shangri-La Hotel where we are on the drink list. And I have to tell them, thank you so much for putting us on the drink list and by the way, you can’t get our bourbon. That’s not a fun conversation.” So, the decision was made to skip the 2016 release of the Toasted Barrel Finish and continue to deliver the US*1 Bourbon.
How Do You Fix the Bourbon Shortage? You 2x Capacity
As part of the Michter’s plan to bring supply into better balance with demand for its ryes, bourbons, and whiskeys, Michter’s decided to build its own distillery. In the past, Michter’s partnered with other Kentucky distilleries to make its products. In 2014, Michter’s built their own distillery with a capacity to produce 500,000 proof gallons of spirits per year. A proof gallon is measured is one liquid gallon at 100 proof at 60 degrees fahrenheit. Based on ever increasing demand, they now have construction under way to double production to 1,000,000 proof gallons per year. The increased capacity is expected to be operational when they resume distillation in August after a one month shut down for annual maintenance.
How Big is Michter’s Distillery?
Michter’s no longer eats Thanksgiving dinner at the kids table. In December 2013 Michter’s Distillery joined the Kentucky Distillers’ Association as a “Proof” level member, the second highest tier in the association based on production and number of barrels aging. Two short years later in December 2015 the Association announced that Michter’s would be moving up to be the first new “Heritage” member in 33 years. Advancing to the “Heritage” level distillers must have at least 25,000 barrels of Kentucky distilled spirits aging in warehouses. To help put this in perspective, the other heritage members at the adult table include Beam Suntory (Jim Beam and Maker’s Mark), Brown-Forman, Diageo North America, Four Roses, Heaven Hill Brands and Wild Turkey.