The news in the whiskey industry has not been very good as of late—there have been layoffs, distilleries are pausing production, and overall sales figures have dropped as people are drinking less, spending less, and tariffs have wreaked havoc upon the market. Despite all that, Buffalo Trace’s parent company, Sazerac, just announced a major expansion to the tune of $1 billion this week, which seems to be going against every other indicator.
Of course, the whiskey industry is quite literally built upon foresight and prediction given that most whiskey will be aged for at least four years, and often about a decade. While there is no crystal ball to reveal what the marketplace for whiskey will be like that far ahead, it’s safe to say that a company as large as Sazerac has done some research to justify the cost and effort associated with this move. Still, just this week there was some bad news for other players in the spirits industry, both big and small. Molson Coors, which owns Blue Run Spirits, announced that it was laying off 400 people by the end of the year (no word on exactly how this will affect its spirits division yet), and the distillery it planned to open this past year never actually started construction. Also, while tequila giant Becle’s stock surged based on recent profit reports, sales of its core brand, the world-dominating Jose Cuervo, dropped by more than seven percent in the third quarter of this year.
Regardless, it seems that Sazerac is feeling bullish about the future of American whiskey, or at least other key brands in its portfolio like Fireball. A few days ago, the New Orleans-based company announced that it was investing nearly $40 million into its bottling facility in New Albany, Ind., which it calls Northwest Ordinance Distilling, where a range of spirits are bottled including the aforementioned Fireball. This will add 25 jobs to the more than 350 positions in Indiana, according to the company. “This expansion marks an exciting next step for our New Albany operation,” said Jake Wenz, CEO and president at Sazerac, in a statement. “As demand for our products continues to grow, this investment will help us better serve our customers while reinforcing our commitment to the New Albany community.”
A few days after that, Sazerac announced that it was investing a whopping $1 billion into building warehouses in Campbellsville in Taylor County, Ky., after requesting tax incentives from the state last August. This comes not long after the company completed another billion-dollar expansion last winter that took a about a decade to complete. According to a story in the Courier Journal, this would create 50 jobs over a time period of 15 years, and will be supported by incentives worth several million dollars. We reached out to Sazerac for a statement, and the company said that this is part of its “long-term vision for sustained, strategic growth.” It continued—”The property will be home to new barrel aging warehouses. We are grateful to the state and local officials who continue to support this impactful investment and look forward to being a trusted community partner in Taylor County. We will share further updates on the project as it advances.”
Authors
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Jonah Flicker