St. George to start bottling/blending sourced bourbon

[sku]

St. George distillery in Alameda California was one of the earlier craft distilleries on the scene. They make a variety of spirits including Hanger One Vodka, St. George Absinthe and their very fruity St. George single malt whiskey. They have now announced that they will be bottling sourced whiskey as well. The excerpt below is from their email newsletter. I find this interesting since we have often opined that sourcing whiskeys is a way for craft distilleries to make money while their stocks age. At this point, St. George has been around for a while, and even released a ten year old whiskey, so presumably, they have aging stocks but are still interested in getting into the Kentucky bourbon game.

Remember way back in May when we told you we were snooping around the rickhouses of Kentucky and plotting a barrel heist? Well, we did it. We brought back a few hundred of the choicest barrels we tasted so that we could share some of our favorite bourbons with you. The twist? We're blending these barrels of Kentucky's finest to create a super-bourbon with a St. George fingerprint. We'll have have more news next month on when you'll be able to sneak a taste for yourself.

[TomH]

I don't have any issues with a new avenue for sourced whiskey be it unknown or LDI. The scary thing is the St George fingerprint if it anything like their single malt.

[tmckenzie]

I know Lance, and he we do a good job of it for sure.

[cowdery]

I have increasingly come to believe that the plan of craft distilleries sourcing whiskeys as a way to make money while their stocks age is, at best, naive, and at worst, an attractive falsehood. I think we know who the liars are. For the rest, there are two problems.

(1) People seem to think it's easy to build up a profitable business sourcing bulk whiskey, bottling it, creating a brand, and marketing that brand. It's not easy and, what's more, it's a different business than the true micro-distillery business, so what you learn doing the one may apply little or at all to the other.

(2) You'll never be able to transition from sourced whiskey to whiskey you made because it will never be the same or even similar enough to affect such a transition.

I'm referring primarily to start-ups. Companies like St. George and Great Lakes are established, have distribution channels, have loyal customers, so they have a receptive audience for anything they choose to produce, whether it's made by them or not. They can be perfectly honest about what they're doing and the vast majority of consumers, who don't pay very close attention, will just assume they made it because they have a reputation as micro-distilleries.

A couple of examples of startups that started that way. Templeton Rye has been in business for six years and has made no effort to replace its LDI-made whiskey with its own make. About the only improvement is that they've stopped claiming they're doing that. Old Pogue has been in business for seven years and is just this year beginning the process of obtaining the necessary permits to start a very small (25-50 gallons a week) distillery in Maysville. Michter's has announced plans to build a micro-distillery in Louisville. Even if, after aging, they mix their house-made whiskey with sourced whiskey, the ratio will probably be 10 to 1 or more. Same way with Templeton if they ever decided to make whiskey in that little still they have. They sell so much sourced whiskey now they can't make enough to be more than a drop in the bucket.