In last week's post we did a pulse check on the secondary market given we're halfway through the year. We also provided some thoughts on the year(s) ahead and noted that "the number of active craft distilleries grew nearly 18 percent over the last year, with California, New York, Texas, Pennsylvania and Washington leading the pack." There are currently more than six new distilleries in the works in just Kentucky alone (before you ask, yes, Bourbon can be made anywhere in the U.S.).
As we all know, bourbon has to age a minimum of two years, though most brands out there are going to let their juice rest in the wood for at least four years and in a lot of cases even longer than that. Given the time component, the uptick in these new craft distilleries seems a bit difficult to understand given that there is a significant time investment in bringing new sources of bourbon online. The delicious secret behind your favorite bourbon is that what you're drinking in a lot of cases is sourced bourbon, most of which have origins that root back to a single company based in Indiana.
What is Sourced Bourbon?
Sourced bourbon is a product bottled by a company that did not distill the bourbon. Bourbon is highly regulated, requiring by law, very specific parameters be met, whether that be the mashbill of greater than 51 percent corn or the new charred oak barrel for storing and maturing the spirit. What is not regulated however is how company X, Y or Z uses terms like "handmade" or "craft" or "small batch." Because of this, marketing these sourced bourbons can be cleverly disguised and to the non-discerning eye one might think that these bourbons were produced onsite. As you can imagine there's a lot of negativity garnered about this practice given it seems a bit misleading. The leading producer of these sourced bourbons is a company called Midwest Grain Products or MGP for short - MGP is likely the name you've heard referenced chatting with your friends about bourbon.
Who is MGP?
Spread across 300 acres near Lawrenceburg Indiana, MGPs facilities include 92 buildings where the company focuses on supplying distilled spirit products to companies with their own brand. The full breadth of their reach is not known but many new "craft" distilleries have been known to source their bourbon from MGP. Beyond selling to others, MGP also has a number of whiskey brands of its own including Penelope, which was acquired by MGP just recently, George Remus and Rossville Union. In 2021, MGP swallowed up Luxco which included brands such as Yellowstone, Blood Oath, Ezra Brooks, Rebel, etc. Beyond bourbon, they produce and sell corn oil, livestock feed in addition to fuel-grade alcohol.
MGP-Sourced Whiskey's You Likely Have at Home
It has been estimated that collectively, MGP produced spirits are sold under about 200 different brand names, though this number may be much higher. Some brands alter their MGP sourced juice to make it more of their own by doing things like re-barreling or aging the juice in a toasted cask, etc.. Some examples of the more well-known brands that source from MGP include Angels Envy Rye, Barrell Whiskey (specific batches), Bulleit Rye, High West, Joseph Magnus, Pinhook, Redemption, Sagamore Spirit Rye, Smooth Ambler and Willett Rye to name just a few.
How Can so Many Brands Fall out of One Distillery?
It may seem astounding that so many different bourbons and ryes are made by MGP and sold under different labels and have enough difference between them to matter. A lot of the differentiation comes from blending of different ages and types of whiskey which allow for the creation of unique flavor profiles. As we all know as well, every barrel has its own particular nuances based upon age, where in a rickhouse that barrel was placed, the mash bill, distillation method, etc. etc. etc. A great example of the multitude of nuance that can come from one distillery is Booker's which produces multiple new expressions every year highlighting the variation that can come from blending of different barrels.
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"As we all know, bourbon has to age a minimum of two years,"...no, we don't all know that. I am relatively new to bourbon, and what I know is that to be called a "straight bourbon", it must be aged a minimum of two years. But I can age it a week and still call it bourbon. And if it is aged less than 4 years, then I must put the age statement on the bottle. So a one week old bourbon may not sell very well. I don't like calling you out, but I expect a certain level of accuracy if you are going to host a website dedicated to bourbon. My OCD wouldn't let me get past this…
Thanks for fighting the good fight and helping spread this important message. In my opinion, sourcing isn’t inherently bad, but it is especially problematic in this era of craft distilling. When you label a whiskey as a “Texas Whiskey”, for example, you are implying that it was made in Texas. If it was actually sourced from Indiana, then most consumers would feel tricked. If you’re not trying to sell whiskey by using a sense of place then sourcing is less of a problem. Transparency and authenticity are both big problems in the world of craft distilling right now.