Since The earliest days American whiskeyMany distilleries supply liquids to brands other than theirs. Known As contract distillation, both parties benefit from the arrangement: The The distillery owner receives immediate payment for the services rendered, and the contract client gets high-quality spirits, made often to their specifications, all without the need to invest in the production equipment or take on any risk. And Consumers benefit from greater variety.

Contract Whiskey has fluctuated with the rest of the industry. But in the past decade, it has seen a boom thanks to the growth in bourbon. Both Existing and new distilleries expand their contract services on a large scale. The outcome of this expansion won’t be just more bottles of whiskey for sale, but a wider array of flavors and styles — although, to be sure, there’s about to be a whole lot more whiskey, too. But This is a good or bad thing for industry?

“Sourcing Is Not a Crime”

Despite Being a part for many years is an important aspect of American The whiskey contract production industry has received a bad reputation in the last century. As Many consumers were unaware that bourbon was reviving 15 years ago. The majority of bottles sold on the shelves came from a few distilleries.”doing business as”() names in order to create the illusion that each brand was its own facility. (Anyone Who’s tried to visit? “Knob Creek Distillery” You’ve probably realized that there is no such place; whiskey is produced at the James B. Beam Distilling Co.’s Clermont, Ky., plant.)

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And There were also new brands whose owners bought and bottled barrels from large distilleries. Some Some were upfront about the practice while others did not disclose it clearly, and some lied about. (This Practice of “sourcing” — purchasing new-make or mature whiskey whose production specs have been decided by the distiller — differs from “contract distillation,” It is the process by which a distillery produces a customized recipe on behalf of a customer. But The two terms are often used interchangeably.

Even The small amount of deception about sourced whiskey sparked suspicion in many drinkers. But it also spurred a movement for transparency: NowSocial media is awash with brands that are caught hiding their source, but those that proudly declare it on social media get praised. “The educated consumer knows all about sourcing,” You can find out more about this by clicking here. Dave Schmier, founder Proof The following are some examples of how to get started: WoodThe line is a highly regarded whiskey that is 100 percent sourced from the United States or contract-distilled. “There’s plenty of haters out there but there’s also plenty of people looking for MGP whiskey,” he says, adding Midwest Grain ProductsThe large Indiana The distillery has produced whiskey for over 100 brands in the last 20 year.

“There’s also the quality control measure of things. We’re not buying the grain off the commodity market; we know exactly where it’s coming from and we actually process the grains ourselves.”

Schmier’s motto is “sourcing is not a crime,” and the wide acceptance nowadays of whiskey made by non-distiller producers underscores that statement — as do the sheer number of brands that rely on sourced or contract-distilled whiskey. But Sources themselves have changed. Where Once major players, Kentucky Now that they have provided clients with barrels and distillation capacity, their attention is now on meeting their own needs. Even MGP is still a contract service provider, but it now also produces house brands such as George Remus, Rossville Union. Penelope — as well as brands for Luxco, which it acquired in 2021 — that all require its resources and attention.

The Craft You can also find out more about the following: Contract

But The bourbon market continues to attract newcomers who are looking for someone to make a product for them. Stepping Craft distilleries are a good example, as many have excess capacity that they cannot use to support their own brands, which is still growing. Among You can also say that Columbus, Ohio’s Middle West SpiritsThe company, which was founded in 2008, began contract production in 2015. Last In the same year, a second store was opened, featuring a 60-inch column, with room for more.

Credit: Middle West Spirits

“As we’ve scaled, our partners have scaled right along with us,” You can find out more about this by clicking here. Middle West’s Director of Partnerships Amy MeshThe increased capacity is not just for the benefit of the customers, but also for the service providers. Middle West’s This gives the company the opportunity to attract new clients and house brands as well as current partners. In We also offer a wide range of services for maturation, including distillation. Middle West It also manages 25,000 acre of farmland to allow it to offer even more customization for its clients. “There’s also the quality control measure of things,” Says Director of Marketing Jennifer Yunt. “We’re not buying the grain off the commodity market; we know exactly where it’s coming from and we actually process the grains ourselves.”

Craft All distilleries sell their excess capacity. Middle West It is the largest company currently doing this. Several There are several new large distilleries in the United States. Garrard County Distilling Co., will operate on this model. Initially, the company will offer a large quantity of contract manufacturing, which gradually declines as its own brands grow. Another The model that is used is the Bardstown Bourbon CompanyFounded in 2014. The Distillery has concentrated on custom contract manufacturing from the beginning and has introduced its first house-made whiskeys recently. However, it does not intend to cut back on contract services, and has even acquired a new facility. Green River Distilling CoFor additional capacity.

Cultivating Capacity

Still A third model is emerging – distilleries that are built exclusively or primarily for contract production. Cordell LawrenceCo-founder of Eastern Light Distilling The following are some examples of how to use Morehead, KyThis is what the, which will start operations in 2025, claims. “next generation” Distillation by contract is a popular option. “The prior giants of the contract world have aged out, meaning they have now been able to grow to a point that it makes more monetary sense for them to focus on their consumer-facing brands and less so on contract,” He explains by pointing out examples such as Wilderness TrailIt was previously contract-distilled and then acquired by Campari Last year.

Facilities You can also like us on Facebook Eastern Light will provide services for both existing non-distiller producer brands and ones to come — and they’ll do more than just distill. While Customization of all aspects of the production will be the foundation. Eastern Light The next step is to offer advice on how to proceed: developing a brand, finding distribution and creating a marketing strategy. And The distillery will be a hub of tourism and a home for brands, if clients wish to do so. “There’s all sorts of different ways that we can help them beyond just filling a barrel,” Co-founder says Caleb KilburnHe left his position as master distiller Kentucky Peerless Distilling CoTogether with Lawrence”, start Eastern Light.

Eastern Light The distillery will keep a small portion of its capacity for their own brands. However, another distillery is set to open in July It is designed exclusively for the contract whiskey industry. Called Whiskey HouseThe company was founded in 1996 by a group Bardstown Bourbon Co. veterans.

“You know exactly the whole chain of custody, everything that went into [each barrel]. It’s really important for telling deep, rich stories about your product.”

It It will use advanced manufacturing technology similar to that used in the food industry. Every aspect of production, from grain selection and enzymes to maturation in unique rickhouses that treat every customer’s barrel equally — no getting stuck in undesirable aging locations — is customizable, with each element tracked and recorded. That Even the most renowned companies cannot match this level of detail. American It would be difficult if not impossible for whiskey producers to comply.

Eastern Light Distilling in Morehead, Ky., which is set to begin operations in 2025, says that this is the
Credit: Joseph & Joseph Architects

The combination of customization, sophisticated data collection, and instant access to that data — along with the suite of other services Whiskey House will provide, like labs and sensory rooms — is currently unique in contract whiskey production. “You know exactly the whole chain of custody, everything that went into [each barrel]. It’s really important for telling deep, rich stories about your product,” You can find out more about this by clicking here. Whiskey House co-founder David Mandell. And. He makes this point. Whiskey House The company will be able analyze all this rich data in order to better understand the needs of its clients. “You can really start doing some very interesting things,” He also adds.

Balancing Supply The following are some examples of how to get started: Demand

Significantly, Whiskey House Only work with brands that have already been established or with companies who are involved in brand creation. In In recent years, many investment groups have invested millions in contract whiskey production. The goal is to age barrels for several years, then sell them at a profit. These “investment barrels,” Mandell Contract distilling has been growing in recent years, and this is partly due to the fact that it’s becoming more popular. But You can also find out more about the following: Whiskey HouseClients who are looking for short-term profits are not interested. “In my opinion, that is not going to last forever,” He says.

Several soon-to-open distilleries in Kentucky In the coming years, we will offer contract production. As As the supply and demand of barrels regulate, contract producers could find themselves in competition with investors as their capacity increases. Then again, bourbon’s ascent shows no signs of slowingThere are still many roads to travel on the international market. So all that whiskey may yet easily find a home on someone’s bar — regardless of where or how it was distilled.

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