The exterior of the new Whiskey House in Elizabethtown, Kentucky
For many, the allure of visiting a legacy whiskey distillery is its history. Distillers can be borderline superstitious, arguing that if they change anything about production — from changing the size of the still to altering the fermenters — it will impact flavor.
The founders of Whiskey House, a new, state-of-the-art facility from the founders of Bardstown Bourbon Company, would not argue that those old distilleries have a certain kind of magic. But their goal is to keep experimenting and advancing to stay at the forefront of spirits innovation.
“It will be the most advanced distillery in the country, hands down,” said Whiskey House’s cofounder and CEO David Mandell during a recent hardhat tour of the 176-acre campus in Elizabethtown, Kentucky, that is projected to cost $350 million over the next decade to fully build out and complete.
Whiskey House began producing whiskey on July 1, crafting their liquid for friends, family, and employees.
The initial team at Whiskey House
By the most advanced distillery, Mandell refers to advancements on multiple fronts. The team has attracted talent from various renowned producers, amassing a total of 347 years of combined experience.
There is no master distiller at the facility. This distillery is the first of its kind, designed specifically to produce highly-customizable contract whiskey orders without establishing its own brand or handling investment barrels. Production on contract orders is scheduled to start next week.
“We are taking processes, technology and procedures from an advanced manufacturing standpoint,” Mandell said, citing Industry 4.0 — the kind of integrated tech and AI you see from companies like Amazon and Tesla. “The idea that there is one person saying this is how everything is made doesn’t work for us, because we have 30 to 40 different customers doing custom mash bills and highly customized production. So we have to have a huge system with tremendous flexibility.”
John Hargrove, Whiskey House co-founder, president and COO, was in food manufacturing before working at Sazerac and Bardstown. He has taken lessons from that field. Whiskey House’s production building is 110,000 square feet, and is laid out where raw goods come in one side, and the semi-finished product comes out the other, ready to head to on-site warehouses.
The Whiskey House lab
Every piece of equipment has monitors on it, explained Roger Henley, the vice president of engineering and technology, who had a background in the oil and gas sector as well as automative industry before moving to work in distilling at Barton’s and Bardstown Bourbon Company.
Customers will be able to log into a custom dashboard and see in real time all the details about how their whiskey was made, from the source of grains in their custom mash bill to where in the warehouse their whiskey is aging and what current conditions are.
Other distilleries do use a lot of this technology, but data collected ends up staying in that department, siloed. Think of QR codes on the bottles of some whiskeys now — it’s likely that data, such as where the grain was sourced or where the barrel was stored in the warehouse, was collected and then entered by hand before the information reaches the consumer. This system is seamless. Henley said what sets it apart is the ability to centralize that data and have AI models use it all to create efficiencies and save on usage of natural resources.
One easy-to-understand example is how to optimize alcohol production in fermentation.
“When you think about fermentation you have multiple different variables: corn grown in different seasons with different nutrient contents, yeast that performs in a certain parameter of [temperature] degrees, and the same thing for enzymes. You can collect all that data using AI,” Mandell explained. “We could actually figure out the exact conditions to increase your alcohol yield and proof gallons, and that will be a game changer.”
The facility is also designed to capture and reuse latent energy throughout the production process, resulting in a 50% decrease of energy consumption as compared to the EPA’s Energy Star Certified Distilleries. It’s got a slew of certifications to assure domestic and global clients everything is up to international code — and is even Kosher certified.
A rickhouse on the Whiskey House campus
The experimentation will continue throughout the aging process. During my recent visit, JT Thomas, the senior warehouse manager, and Phil Mays, the assistant warehouse manager, showed how they were testing a new type of food-grade sealant to help fix barrel leaks, as well as how the windows in the warehouse were designed to open at specific angles to experiment with airflow and its impact on aging.
And speaking of those warehouses, they also have airflow ducts at the base and are built longer and thinner than typical warehouses, so no client ends up in a less-desirable position in the rickhouse.
If a client has a specific request on where they’d like to be placed in the rickhouse, Whiskey House will do their best to accommodate it. It speaks to a larger business model of a contract facility that is built to service clients that have a clear pathway to using the whiskey in a brand. Whiskey House won’t be creating their own brands (or nabbing those most desirable warehouse spots themselves) and it won’t be making or holding investor barrels, something Mandell has seen drive up price and tie up capacity for brands that need production.
“It creates a bubble in the market and it’s really not healthy for the industry,” he said last fall.
In the intervening months, there is now more capacity in the industry as some legacy whiskey brands have slowed down their own production and other contract whiskey makers have expanded, lowering prices that had made it difficult for craft whiskey brands to survive. Mandell said the change in the market has not changed their business outlook.
“They [other producers] watched what we did at Bardstown and they thought it was going to be easy. But they don’t have the knowledge in many cases or the experience to do this type of production. It’s easier said than done,” Mandell said. “So what we’re seeing is that while there’s excess capacity, the best business is coming to us. And it’s what we predicted.”
Monica Wolf, a founder of The Spirits Group, a consulting firm that advises clients on business, production, and distillery design, has a holistic view of the industry because she also brokers barrels.
“The frothy nature of the barrel market the last few years, born from financial interest by groups outside of the whiskey industry, was never going to be sustainable,” Wolf said. “The inflated pricing has now corrected and we’re seeing aged barrel pricing at or below where it’s been historically.”
Wolf said the market is nuanced and complicated and “with all times of feast and famine there are winners and losers.”
“From a brand perspective and something that will never change: having the patient capital to invest in new fill barrels at their lowest cost basis, in order to control costs, will always be a winning proposition,” she said.
Wolf said they are scheduled to begin distilling at Whiskey House for both Lucky Seven and EJ Curley this fall. Ashley Barnes, the group’s Master Blender, selected and submitted the custom mash bills, yeast strains and level of char, toast and seasoning for the barrels.
“Having Whiskey House of Kentucky for quality distillate, made to spec, is an incredibly important part of our process. Choosing a quality barrel cooperage along with the toast, char and seasoning level of the staves that properly compliments the kind of products we’re intending to make is another important part,” Wolf said.
In the case of Lucky Seven and EJ Curley, they will then take the barrels to their own facility, The Blending House in Shelbyville, Kentucky, where Barnes will monitor aging and blending.
Whiskey House has sold 90 percent of their production capacity for the next five years and is also working with clients including Milam & Greene, Chicken Cock, Western Spirits and Whiskey JYPSI, as well as overseas production for large legacy spirits companies and ready-to-drink beverages.
If all goes to plan, production will soon double. The company started operations with greater than seven million proof gallons of annual capacity and will expand to more than 14 million proof gallons in 2027.
The space will soon include areas for clients to design their products with the Whiskey House team as well as space for them to host events. Eventually the campus will house 33 rickhouses, a palletized warehouse, a spent grain processing facility, a bottling facility, a rail system, as well as access to one of the highest yielding hydro stratigraphic limestone aquifers in the region, which sits 120 feet below the property.
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