A Tale Of Two Rectifiers Part One

In the 1990s, both Julian Van Winkle and Even Kulsveen were operating each of their businesses with a rectifier license. This allowed them to sell whiskey without owning a working distillery. Both had warehouses at a distillery in which where they stored the barrels of whiskey they purchased from other distilleries. In the thirty years since, both companies have grown and prospered, but they took two different paths to reach this prosperity.

Julian Van Winkle, Jr. obtained his license when the family sold the Stitzel-Weller distillery in the 1970s. He made an agreement with the new owners that allowed him to purchase barrels for Stitzel-Weller to bottle under the Old Rip Van Winkle brand. This was mostly decanters at first, but there were some bottles as well. When Julian III joined the company, he learned the business and created his own business plan. When Julian, Jr. passed away, Julian III began to change the business.

First of all, he purchased an abandoned distillery in Anderson County and set up his own bottling line. He moved away from decanters and started bottling whiskey older than what his father had bottled. Like his father, Julian III was purchasing barrels from Stitzel-Weller, as well as, from some other distilleries when he found barrels that met his standards. It was not an easy way to make a living. He and his family were his main employees at the bottling house. He was chief bottle washer, mechanic, salesman and janitor.

Julian III likes older whiskey when it is aged correctly. He has a great palate and bottled whiskey that he considered of excellent taste. He was right and people did purchase it, but mostly overseas in Japan. That trade kept him in business in the late twentieth century decades when Bourbon sales were declining in the United States. He scraped by from year to year.

In the 1990s, he took an even tougher gamble by releasing a twenty year old Bourbon named for his grandfather, “Pappy” Van Winkle. It was the oldest Bourbon in the United States market at the time and he had no idea whether consumers would purchase a whiskey that old. The brand became a hit when Wine Enthusiast Magazine gave it a 99 out of 100 ranking – the first Bourbon to receive such a high ranking. Sales began to pick up and he followed this success with a Pappy 23-year old Bourbon and a 13 year old Van Winkle Family Reserve Rye Whiskey.

However, the 1990s saw the closing of the Stitzel-Weller Distillery, Julian’s major source of barrels. He needed a source of whiskey that he could depend upon if he was to stay in business. He did not have the funds to build a distillery or even purchase an abandoned distillery he could rebuild. His decision was to form a partnership with Buffalo Trace Distillery. They received a share of his business in return for contract distilling whiskey for him. This agreement assured him of a source of whiskey in the future, but he had over a decade to wait before the youngest whiskey he bottled would be ready. It was a long wait and not made easy by the boom in the Bourbon sales.

The sales of his product after ten years was exponentially higher than he thought when they signed the deal and the shortage was not something that could be made up overnight. It takes a decade to make his youngest product and some of those barrels he has to keep to have whiskey for his 15, 20 and 23 year old products. And as the barrels age, the angel’s share increases, so there is less whiskey in each barrel. The shortage will last for at least another decade, maybe two.

Julian still operates under a rectifier license. He is still a separate entity from Buffalo Trace and to operate legally, he must have a license and does not own a distillery. It is a tough business and expensive business, where you have to wait years before you even have a product to sell. His path of business has led to him producing one of the most popular and exclusive brands on the market today. Julian Van Winkle III took one path, but Even Kulsveen took a different one and we will discuss that in part two of A Tale of Two Rectifiers.