Is This Bourbon’s Next Billion-Dollar Idea?

Proprietary advantages are rare in the bourbon industry. Compared to at least some other whiskey styles, bourbon’s production requirements are restrictive. They’re also clearly defined under the law, leaving zero wiggled room for differences in legal interpretation. 

Remember, for a spirit to be labeled a bourbon in America, the whiskey must be made somewhere in the US from at least 51% corn. It must also age in new charred oak containers. Finally, there are also various stipulations related to proof. Bourbon can’t be distilled at more than 160 proof, barreled at higher than 125 proof, or bottled below 80 proof.

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Given the circumstances, distillers and their marketing-minded colleagues deserve plenty of credit. Together, they’ve built a thriving ecosystem of hundreds of brands. And they’ve done it mostly without the luxury of patents and exclusive technologies that entrench competitive advantages across other industries.

But what would the bourbon industry look like if that suddenly changed?

What if, instead of relying exclusively on hooks like secret family recipes and local pure waters, bourbons were further distinguished in tangible ways by brand-exclusive ingredients chosen to match the specific requirements of their master distillers?

The answer to this hypothetical could arrive surprisingly soon thanks to a new movement gaining critical momentum today.

THIS TREND IS NOT LIKE THE OTHERS

Widow Jane

New ideas don’t stay novel for long in the bourbonverse. Many are marketing novelties designed to steal attention, if only for a moment. But at least a few have added compelling new layers to the century old product and grown the industry in the process.

Barrel or cask finishing – i.e., subjecting bourbon to a least a brief pit stop in barrels initially used to age other products like sherry, port, brandy, rum and more – is one such example that’s now touched almost every corner of the industry.

While it’s produced some questionable experiments, it’s birthed plenty of unique bourbons too and at least one impressive new brand, Angel’s Envy. More importantly, it’s been a key driver of bourbon revenue growth in recent years.

Angel’s Envy

Now, another movement is taking shape, that at least for casual observers, looks and feels like bourbon’s finally having its farm-to-table moment.

Earlier this month, Widow Jane Distillery announced a new Baby Jane bourbon made using the brand’s own unique “Baby Jane” corn, which the brand claimed was the first nationally available bourbon made using a proprietary heirloom corn.

The corn itself resulted from over a decade of work, according to Widow Jane’s press materials. Two team members ordered a variety of heirloom corn strains and planted them back in 2013. Next, a new proprietary strain of heirloom corn was born through a combination of natural selection, cross-pollination, and good ole’ human-assisted interventions pulled right out of Gregor Mendel’s playbook. 

A few days later, Heaven Hill, America’s largest independent family-owned and operated distiller and maker of brands including, Elijah Craig, Evan Williams, and Old Fitzgerald, announced a new line of so-called grain-to-glass whiskies.

Heaven Hill

Like Baby Jane, Heaven Hill’s new Grain to Glass series has been many years in the making. In 2017, Heaven Hill Executive Chairman Max Shapira had the idea of developing a bourbon around specific grains selected by Heaven Hill’s master distiller. So, he partnered with the Indiana-based seed company Beck’s Hybrids. 

According to Heaven Hill, the two companies began selecting corn varietals for specific attributes, including higher starch content, improved yield, and the seed’s ability to thrive in central Kentucky soil. The selected plants were then crossed to create a new corn seed with a single goal: to produce “the highest quality whiskey” with “special attributes” for the Grain to Glass series.

Since the inception of the partnership, Heaven Hill’s Master Distiller has now selected a unique corn seed varietal each year from Beck’s, which is then grown at two local farms near the company’s distillery. 

We can’t move further before noting that Heaven Hill purchased Widow Jane’s parent company, Samson & Surrey, in February 2022. So they are now both part of the same family. Still, it seems they both embarked on independent efforts to cultivate proprietary corn well before the union occurred.

Widow Jane and Heaven Hills’ moves here are also different from famous examples like Balcones Baby Blue, made from Texas-grown blue corn. They aren’t just the next distillers going out of their way to source a unique ingredients already in production somewhere else. They’re intentionally cultivating new, exclusive, or at the very least, highly difficult-to-replicate ingredients, literally from the ground up.

SO IS CORN NOW THE NEW YEAST?

Four Roses

There’s at least one organic component of the bourbon distilling process that’s already treated as a proprietary technology of sorts by some distillers: yeast. 

As the driver of fermentation, which plays a heavy role in the eventual taste of bourbon, many brands have long viewed and treated specific yeast strains as secret ingredients to be preserved and protected.

Four Roses famously touts the role its five different proprietary yeast strains have on the company’s ten distinct bourbon recipes. “Beam yeast” also has a distinct genealogy. And while most of Heaven Hill’s original distillery facilities burned down in 1996 during what’s generally considered to be one of the worst distillery disasters ever, a genuine silver lining was that the company’s yeast, which had been cultivated and handed down for generations since 1935, somehow survived. 

Given the restrictions around bourbon making and distiller’s existing experience with yeast, it’s natural to wonder why the industry’s held back from developing other proprietary ingredients in the past.

The likely answer is that desperate times call for desperate measures, or perhaps more accurately, prescient measures. At least for bourbon distillers seeking to stand out in the decade ahead.

WHY IS THIS HAPPENING NOW?

Gear Patrol

Until now, investing the time and expense into developing bespoke grains hasn’t been necessary for bourbon distillers to compete and grow. But even the bourbon industry of the late 90s looks nothing like the industry today. 

According to the Kentucky Distillers Association, bourbon production has increased by 465% since 2000 and is now a $9 billion industry.

To ground this in terms of amounts of actual whiskey produced, consider this. In 2009, Kentucky’s total bourbon inventory sat at around 4.6 million barrels. In 2022, Kentucky distillers produced a record 2.7 million new barrels of bourbon in a single year, marking the fifth consecutive year that annual production surpassed 2 million barrels, according to reports paid for by the distillers’ association.

This massive increase in production means that a record inventory of 12.6 million bourbon barrels were aging in warehouses at the start of 2023. And the industry doesn’t appear ready to slow down any time soon. 

According to the Kentucky Distillers Association, a $5.4 billion bourbon-related construction boom is also now underway, which, once completed, will presumably bring even more bourbon production and storage capacity online. 

And yet, as an IBISWorld 2024 report and future forecast of the bourbon industry succinctly observes, “a lack in product innovations means many [brands] compete based on perceived quality and consumer preference.”

WHAT REMAINS TO BE SEEN

Photo by Chandler Bondurant for Gear Patrol

While the IBISWorld report’s stinging commentary rings true, it’s reasonable to wonder if developing bespoke grains for bourbon is really a necessary move, even in the face of the unprecedented competition ahead.

The growth the bourbon industry is banking on can’t come from existing fans doubling down alone, even if premium and super premium bottles continue to be a lucrative source of profits. The real challenge remains getting new consumers into the bourbon-drinking fold.

Sex sells. But proprietary corn doesn’t feel like a factor that’ll drive future bourbon drinkers to choose one brand over another.

Dismissing interest in custom grains as a pure marketing reach still feels premature though. There are at least a few possible futures in which tailor-made ingredients do lead to eventual brand-defining flavor trademarks or, more mundanely, critical supply chain advantages for the distillers investing in the practice.

Given the bourbon industry’s longstanding track record of building brands on folksy tales of legacy and craftsmanship so far, whether actual demand for this unique breed of bourbon grows might be irrelevant.

As consumers, we all seem destined to hear more about heirloom corn and other uniquely cultivated ingredients in the years ahead. And if that alone keeps the world’s attention fixated on bourbon instead of something else to sip on, that may be the only payoff distillers need.

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