Contract distilling has been around since the birth of the distilling industry in America. In the earliest days it was simply getting a distiller to make whiskey out of your excess corn when you did not own a still yourself. Later, people started searching out the best distillers to make their whiskey for them. The next step was to get a distiller to make whiskey to your specifications. S.C. Herbst did this in the 1880s at the Old Taylor Distillery. He specifically wanted a pot still-distilled Bourbon for his Old Fitzgerald Bourbon and gave Taylor the mash bill he wanted fermented and distilled. Later, in the early twentieth century, Julian Van Winkle signed a contract with the A. Ph. Stitzel Distillery to make 100 barrels of Bourbon for W.L. Weller & Sons. No, it was not a Bourbon made with wheat, it was a traditional Bourbon made with rye.
After Prohibition, contract distilling often took the form of simply making a certain number of barrels of whiskey for another firm or a liquor store’s private label. This could be a unique mash bill but was often simply barrels of new whiskey made to the distillery’s mash bill and style. David Sherman (now Luxco) did this later with their David Nicholson 1843 brand. They simply had Stitzel-Weller Distillery make their Old Fitzgerald recipe and barrel it under the David Nicholson name. This practice became less common in the 1970s and 80s as whiskey sales plummeted. Private label whiskey sales also shrank and many places quit producing such brands. The distilleries also had excess whiskey already made, so they concentrated more on selling those barrels than making new barrels for someone else.
As whiskey sales began to rise, led by Bourbon sales, more people wanted to get back into the distilling industry or, at least, the rectifying industry. They created new brands and many of these brands were created by using the excess barrels of aged whiskey the distilleries had on hand. However, after a few years, those barrels were in high demand and the distillers were less likely to sell them to another party. This led back to companies without distilleries looking for distilleries to do contract distilling. Heaven Hill and Barton were the traditional places to go to when you wanted to contract distill, but even these distilleries were getting too busy to do distilling for other people. The breakup of the Seagram Corporation at the beginning of the 21st century, opened up their Lawrenceburg, Indiana distillery as a source of whiskey and contract distilling. The demand had become great for contract distilling. Soon other new distilleries saw an opportunity to make money while their whiskey was aging by contract distilling. Companies like Bardstown Bourbon Company, Castle & Key Distillery and Kentucky Artisan Distillery went down this path.
There are many brands that started off with contract distilling, but then invested money into building their own distillery in order to supply the whiskey they needed. Michter’s Distillery, Luxrow Distillery, and Preservation Distillery all were using contract distilled whiskey at one time, but now have built their own distilleries to support their brands. This does not mean that contract distilling is losing ground and becoming less profitable for distilleries who are doing contract distilling. There are still plenty of smaller companies with a need to contract distill their whiskey. In fact, the number is growing larger as brands established with sourced whiskey need to increase their volume and excess whiskey from the distilleries is becoming harder to find.
The advantage of contract distilling over buying sourced whiskey is you get to have a say in the quality of the whiskey being made. It is your mash bill, grain preference, yeast preference, barrel entry proof and age when it goes into the bottle. The disadvantage of contract distilling is that you do have to wait for the whiskey to age.
Sourced whiskey is ready for the bottle when it is purchased. The drawback to sourced whiskey is that the barrels the distilleries are offering on the secondary market are, generally, the barrels they rejected when picking barrels for their brands. You are buying the distillery’s “seconds” for your brand.
Contract distilling is a part of the distilling industry that has been around since the industry began. There are advantages and disadvantages to contract distilling, but it is a way to make your own unique recipe in someone else’s kitchen. It really is your own whiskey and flavor profile and consumers do appreciate such whiskeys.
Photos Courtesy of Rosemary Miller