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MGP buys Luxco

3 12

@Frost
Frost started a discussion

An interesting development, I assume MGP will start buying up NDP's that source from them.

And that Luxco will now source from MGP, instead of Kentucky.

about one month ago

12 replies

@Victor
Victor replied

@Frost this is a significant development in the US whiskey world. This looks more like a move by MGPI to expand production to me. This is not merely the acquisition of brands, but also the acquisition of another new distillery. Luxco has its own distillery as of 2016:

chuckcowdery.blogspot.com/2016/01/…

I am very interested to see how MGPI handles the flavour profiles and quality control of Luxco legacy brands like Ezra Brooks and Rebel Yell. I've always liked 90 proof Ezra Brooks, which was my father's favourite bourbon. And Rebel Yell, while inconsistent in quality in my experience, has enormous potential of being a solid more consistent wheated bourbon at a very competitive price.

MGPI has a solid history of quality. This development should be very interesting to watch. I am optimistic.

I am not at all sure that MGPI has any intention of buying up NDPs. Its business model up until now has been almost exclusively that of being a bulk producer and source to the 'sourcers'. Luxco was a sourcer that became a producer. The newly expanded MGPI looks to be more of a retail brander than before because of Luxco's brands, but still the Indiana distillery's large production continues overwhelmingly to be sourced to others. I do expect that the MGPI owned Ezra Brooks and Rebel Yell will at some soon to come point have a HUGE jump in their price points. These are in the US currently $ 15 bottles, and often worth double that. I expect that in a year or two that they will be more like $ 30 bottles to buy, by US local prices, of course. Despite having more bottles than I can drink in the next 40 years your post makes me want to go out and buy a 750 ml bottle of Ezra Brooks 90 proof 1.5 miles from my house for $ 12.99 plus 9% tax, or a 1.75 ml bottle for $ 22.99 plus 9% tax. I expect the opportunity to buy these at these prices to disappear soon. And yes, I would enjoy Ezra Brooks on almost any day of the year.

about one month ago 5Who liked this?

@casualtorture

@Victor Yeah I'm worried because I buy Rebel Yell 100 regularly at $16.99 a bottle. If it goes to $30 it's back to ole Evan Williams BiB for the sub $20 go-to.

about one month ago 2Who liked this?

@Victor
Victor replied

@casualtorture yes, Evan Williams BIB is a top pick in the inexpensive category. I'll also drink Fighting Cock, Virgin Bourbon (if I can get it), any other Heaven Hill BIB, Virginia Gentleman (not sold in Tennessee, is it?), and the aforementioned Ezra Brooks, 90 proof version.

A few years ago Old Weller Antique 107, Ancient Ancient Age 10 Star, and Ancient Ancient Age 10 Years Old were also under $ 20 per 750 in the US. Those days are long gone.

about one month ago 4Who liked this?

@Victor
Victor replied

Looks like the new Lux Row Distillers distillery was announced at the beginning of 2016, but didn't actually open until April of 2018. Their flashy visitor's center received 85% 5/5 reviews from visitors. This is a HUGE move toward a more PUBLIC identity for the MGPI liquor operations. Now they have a Kentucky Bourbon Trail presence in Bardstown, and, unlike the no-public-tours Indiana operation, are extremely tourist and visitor friendly in their Lux Row Distillery location.

about one month ago 2Who liked this?

@casualtorture

@Victor No HH BiB is not in Tennessee unfortunately. But I have plenty of family in Louisville and Lexington who are also whisky nerds so they'll bring some Kentucky exclusives now and then.

30 days ago 2Who liked this?

@cricklewood
cricklewood replied

I missed this thread, this MGP Luxco deal was really interesting. It's funny but I expected some sort of big acquisition or change in American whisky this year and one month in we get this unexpected thing.

It's an interesting propositions for both entities. MGPI has become the de-facto supplier for most NDP's and despite being a known commodity, they haven't really made a presence on the market with their own house brands.

Luxco has built an impressive portfolio and in recent years has really leaned into the enthusiast markets with their special releases (they also have a impressive portfolio of non bourbon products). The info I've gathered seemed to indicate that Don Lux would have been perfectly happy to continue sourcing the majority of his whisky from Heaven Hill if it wasn't for the fact that they had been advised by HH their contract would not be renewed, hence the necessity of starting their own distillery.

@Victor you're correct, this purchase gives MGPI instant Kentucky street cred, which has always kept them at a certain arms length. It also positions them as a pretty important spirits player with all the rest of the portfolio. I'm curious to see how they will assign production, some folks are speculating the Luxco brands will be supplied by MGP but I am not sure they'll want to lose the Kentucky designation on all these well known brands, they can likely ramp up production in Kentucky as well now that their pockets are deeper.

I'm still shocked no one has talked much about Sazerac's acquisition of Collingwood distillery and Early times from Brown Forman in 2020

21 days ago 4Who liked this?

@Victor
Victor replied

@cricklewood will you talk to those people at the Collingwood distillery and get them to give tours? I've vacationed there 3 times and no can see. So far, though, I don't think that I've liked a single sip of any whisky I've tasted that was made at the Collingwood distillery. You'd think that they CAN make decent products. Under Sazerac I expect that they will.

Early Times is a cash cow, just as Fireball is a cash cow. Those people at Sazerac Company know exactly what they are doing. Did you note that Sazerac announced a $ 500 million expansion of production operations in 2019? And their Tennessee whiskey distillery, which was acquired 4 years ago is already sitting on their own distillate 4 year old aging whiskey. This new Sazerac Tennessee Whiskey is scheduled to be bottled and sold at 6 years old.

21 days ago 5Who liked this?

@Victor
Victor replied

N.B. it was the Popcorn Sutton Distillery in Newport, Tennessee, which was bought by the Sazerac Company in December of 2016, and at which their Tennessee Whiskey is being produced. Popcorn Sutton was a moonshiner who wanted and built a legal distillery. Despite his efforts in building a legal distillery he nonetheless later ran afoul of the law. Popcorn Sutton committed suicide rather than going to Federal Prison.

21 days ago 1Who liked this?

@cricklewood
cricklewood replied

@Victor I'll talk to them but I doubt they'll listen. Among he Legacy distilleries in Canada, I believe Hiram Walker is the only facility offering tours and that is a recent development.

The quality of the whisky bottled under the Collingwood brand ranges from awful to passable. The entry bottle finished with to toasted maple is a mess of artificial banana. They did put out a mixed mashbill product called "the town" that showed a glimmer of promise.

That said I know most of the product made there is about bulk/contract sales and its been proven by many other Canadian facilities that even some bog standard double column corn whisky can be exciting if left alone for a while and presented at a decent proof. They could also put together some amazing products if they put the care in.

I've also noticed Sazerac has been increasing the presence of it's Canadian products, it's sadly still a lot of Caribou Crossing & Royal Canadian small batch at 40% ABV but I'm ever the hopeful fool.

After many discussions with @paddockjudge I speculated a few years ago that American designation for "blended whisky" was maybe the next frontier. This category is maligned because of the ability to use up to 80% neutral spirits and being the dumping ground for junk. Yet we've recently seen what can happen with skillful blenders & good stocks, Little book 2 & Mr. Sam! Each offered a familiar entry but a broadened palate from the merging of both these styles.

I'm (foolishly) hoping we see some more of this kind of thing or if not at the very least some decent proof Canadian whisky brands to compte with Wiser's coming out of Sazerac.

21 days ago 5Who liked this?

@Victor
Victor replied

Here is a nice article from Whisky Advocate, which states that the main motivation for the acquisition by MGPI of Luxco was to go more widespread with MGPI's several fledgling house brands now having at its disposal Luxco's well-established national sales and distribution network. Ever heard of George Remus, Rossville Union, or Eight & Sand? I had not either. Those are MGPI brands which previously lacked a national distribution network and now have one.

whiskyadvocate.com/mgp-luxco-kentucky-bour…

4 days ago 1Who liked this?

Astroke replied

@Victor Have wanted one of those George Remus releases for some time. I really like MGP Bourbon, especially at cask strength.

3 days ago 1Who liked this?

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@RianC@Victor@OdysseusUnbound

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