Diageo Announces New Distillery in KY

[squire]

the folks at Diageo probably don't care whether hipsters move on to rum or tequila QUOTE]

Diageo brands cover the other bases as well.

[Josh]

Of course it could never happen again. World War I was the war to end all wars, right? And Diageo's record with American whiskey is impeccable.

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[cowdery]

This is going to be a very small distillery, one of the smallest in Kentucky. Consider this. Bulleit is a 600,000 case brand today. The maximum capacity of this distillery will be 750,000 cases. This is maybe 1/5 the size of Heaven Hill, 1/10 the size of Jack Daniel's, maybe less. This is only slightly larger than what Angel's Envy and Michter's are planning to build. This is more comparable to Willett than Jim Beam. We don't know anything about why, or what they're really planning, and there may well be a coming glut, but Diageo's Baghdad distillery won't be the reason.

[Old Dusty]

there may well be a coming glut, but Diageo's Baghdad distillery won't be the reason.

Love that it's in Baghdad. Gives Diageo the opportunity for a whole slew of dumbass names for any new products. Old Scud Stud anyone?

[MyOldKyDram]

I just hope they find a master distiller named Bob.

[Josh]

Nice tie in opportunity for Outkast to do their own whiskey. Bombs Over Baghdad Bourbon (BOBB)

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[macdeffe]

Maybe it's just a cask seasoning plant, they need an awful lot of ex-bourbon barrels for all the extensions they are making in Scotland. And a new megadistillery there as well in Alness

Steffen

[Josh]

Maybe it's just a cask seasoning plant, they need an awful lot of ex-bourbon barrels for all the extensions they are making in Scotland. And a new megadistillery there as well in Alness

Steffen

:slappin:

I love it. Well played.

[Gillman]

Maybe it's just a cask seasoning plant, they need an awful lot of ex-bourbon barrels for all the extensions they are making in Scotland. And a new megadistillery there as well in Alness

Steffen

Interesting suggestion. Maybe the need kind of ties in on both sides of the Atlantic, the projected need for extra barrels there and the natural arc in sales for Bulleit and Harper internationally.

Maybe they will age just 2-4 years to get the barrels over faster and sell that to NDPs, another possibility.

Gray

[squire]

Are you guys serious? They could buy a lifetime supply of used barrels for a fraction of what they're investing in this plant.

[393foureyedfox]

Are you guys serious? They could buy a lifetime supply of used barrels for a fraction of what they're investing in this plant.

methinks theyre joking, squire....saying Diageo doesnt know/care about american whiskey

[squire]

Joking! Joking about whisky? That's blaspheme, that's what it is.

[garbanzobean]

I think not reopening S-W was a smart move given the water, mold, location, and asbestos considerations. Let's face it: Shively, KY is not exactly a tourism hotbed. I avoided that place like the plague when I lived in Louisville. That said, I find it interesting that Diageo is willing to spend that much on building a brand new distillery with fairly limited capacity. Maybe they are trying to consolidate bourbon-related operations there. I think it is fair to predict that whatever product comes out of this distillery, it will likely be a premium, high age one. It doesn't make sense to build a distillery that small, yet that expensive, and then dump it all into Bulleit. Especially when Diageo's U.S. President mentioned building a pappy-like craze for their bourbon, starting with the Orphan Barrel project.

[Josh]

Maybe the intent is for it to be a tourist attraction like Woodford.

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[garbanzobean]

Maybe the intent is for it to be a tourist attraction like Woodford.

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I'd expect so. Then again, Diageo measures its revenues and profits by the tens of billions each year, so I guess $100,000,000 isn't really all that much of a stretch for them. Maybe they just didn't want someone else to put a distillery there.

[squire]

I'd say positioning themselves (literally) for market conditions several years down the road.

[mark fleetwood]

I think not reopening S-W was a smart move given the water, mold, location, and asbestos considerations. Let's face it: Shively, KY is not exactly a tourism hotbed. I avoided that place like the plague when I lived in Louisville. That said, I find it interesting that Diageo is willing to spend that much on building a brand new distillery with fairly limited capacity. Maybe they are trying to consolidate bourbon-related operations there. I think it is fair to predict that whatever product comes out of this distillery, it will likely be a premium, high age one. It doesn't make sense to build a distillery that small, yet that expensive, and then dump it all into Bulleit. Especially when Diageo's U.S. President mentioned building a pappy-like craze for their bourbon, starting with the Orphan Barrel project.

Premium yes, high-age not necessary. As we've seen, just put it in a different-looking bottle and make up some story on the back about how the area that this bourbon came from is 250 yrs old.

[jburlowski]

A giant investing in the Kentucky bourbon business? I view it as a huge positive.

And much cheaper than trying to resurrect Stitzel-Weller. When I toured that distillery, it was obvious that the physical plant was in deep disrepair. I imagine that the cost of asbestos abatement alone would approach the cost of the new (state of the art) distillery.

It would be nice if they saved and re-used the old, original S-W still --- which we didn't get a chance to see but were told by the security guy was in place and in pristine condition.

[squire]

Old still in the new place?

[garbanzobean]

Premium yes, high-age not necessary. As we've seen, just put it in a different-looking bottle and make up some story on the back about how the area that this bourbon came from is 250 yrs old.

Who knows. With Diageo, I rarely have an issue with what's in the bottle, just with the marketing or pricing scheme (in the case of their older scotch whisky). I think they priced their Orphan Barrel products pretty competitively, but their marketing was irritating. I'm hoping that with the establishment of a true bourbon distillery, they'll be more honest with their marketing, keep things priced competitively at the beginning, and hopefully will come out with some nice products. I'm sure they'll find a way to annoy me eventually, but I'm choosing to believe that they'll do this right.

[jburlowski]

Old still in the new place?

Yeah... why not?

[Josh]

The S-W still in Baghdad. That's a helluva thought.

[squire]

Instant heritage in a new facility, that would be unique.

[Paddy]

I think that 2M is still being put into the old SW location in Shively so that it can be brought up to snuff for tours, so I doubt they will move the still to Baghdad (but who knows).

With the tax incentives, the Shelby county location makes perfect sense. It's a great location with plenty of room for growth, if needed.

[mbroo5880i]

I think it is a positive but I am still curious as to what experience Diageo has in building a distillery from the ground up and whether they have selected a distiller to oversee its construction.