Heaven Hills portfolio includes the Evan Williams and Elijah Craig whiskey brands as well as Deep Eddy vodka

Heaven Hill's portfolio includes the Evan Williams and Elijah Craig whiskey brands as well as Deep Eddy vodka

Later this year, US spirits firm Heaven Hill Brands will see both a new Bourbon and a new vodka production facility become operational. Yesterday, just-drinks sat down with Heaven Hill president Max Shapira at Vinexpo in Bordeaux to talk about family ownership, the Bourbon boom and the company's investment in vodka.

j-d: What is the ownership structure of Heaven Hill?

MS: Heaven Hill is an independent, family-owned company. My father and his brothers founded the company in 1935, so we've been at this for 80+ years and the third generation is now firmly in place. We're looking forward to a long, independent, family-owned future. We finance our business internally.

j-d: Do you have any interest in selling up?

MS: None.

j-d: You and your family have been in the whiskey business for a long time. Is the segment's current boom unprecedented?

MS: It is cyclical and has been over the course of many years but, frankly, we have never seen anything quite like the enthusiasm, not only here in the US, but it is seemingly taking place all around the world. That's what makes it so unusual. There is so much more innovation, unique products, different formulas, different mash bills - all things that consumers today are looking for. We think the future is extremely bright.

j-d: What will be the next big trend for American whiskey?

Innovation will continue but it takes patience and perseverance

MS: I think we are really just on the cusp. For example, one of the best ways we have of communicating what we are doing is on the Bourbon Trail, which is really in its infancy, yet it is bringing hundreds of thousands of visitors to Kentucky. Innovation will continue but it takes patience and perseverance.

j-d: Are you able to manage current stock levels?

MS: It's a bit dicey: That's the best way I can put it. We have approximately 1.3m barrels of Bourbon whiskey ageing at our facility - ranging from whiskey that has just been made to a few whiskies that are in excess of 20 years of age. We used to look at it every six months but today we look at stock pretty much on a monthly basis to make sure that we are not exceeding the allocations that we have for various brands. We are in reasonably good condition but I wouldn't say that we are in great condition. We are very cautious as to how we allocate whiskies into the marketplace.

j-d: How will you manage that going forward?

You really have to have a long-range plan, fully thought out

MS: To use an oft-quoted phrase, we're bullish on Bourbon. We are in the process of finalising an expansion of our production facility in Louisville, Kentucky. When that is finished, we will be able to expand our production capacity of new whiskey by approximately a third. We are obviously building new warehouses to be able to age those barrels. But, this is not a cure for something that is going to be happening in a year or two or three - we're talking about ten, 12, 15 years down the road. You really have to have a long-range plan, fully thought out.

Heaven Hill Brands president Max Shapira

We will be able to produce somewhere in the range of 400,000 barrels a year. That's a substantial amount of whiskey. The project is going to be finished by the end of July and it's an investment of about US$25m. It's not a small investment. 

j-d: We have seen several rye launches recently. What are your rye plans?

MS: Rye is a really great sub-segment of the American whiskey business. We've been in the rye whiskey business for a very long time. We have a brand, Rittenhouse, that has become the darling of mixologists around the world.

It was acquired by us almost by accident in 1993 - as a throw-in at the last minute of an acquisition we made. It has turned out to be a wonderful brand for our company. When we bought it, it was virtually doing nothing, it was in one or two markets in a very small way. Today, it's approaching 100,000 nine-litre cases.

j-d: How important is the on-premise in driving trends in American whiskey?

MS: We think it has been highly instrumental in helping the category become more acceptable over the last five-to-ten years. The mixologist community has been so supportive in that they have been able to come up with a broad range of flavours and styles and drinks that people years ago wouldn't have ever even dreamed you could use American whiskey for, as an ingredient.

j-d: Moving away from whiskey, can you tell us how the Deep Eddy vodka brand is bedding in since you bought it in 2015?

We remain over-the-top excited about the progress of Deep Eddy vodka

MS: We were excited a year and a half ago when we bought the brand. We remain over-the-top excited about the progress. We are selling over 1m cases. What's really interesting is that not only are the flavours growing but the straight vodka is growing at an even faster pace.

j-d: Several producers have talked about paring back on flavours - or sticking to more traditional flavours. Is that something that Deep Eddy is doing?

MS: We are very cautious in any new flavour development. We launched a peach variant, which is doing quite well and we just recently launched an orange version which seems to be having great traction in the marketplace. Deep Eddy is produced using natural, real juice flavours so it can only expand into very limited flavour profiles.

j-d: And, you're planning to open a new production facility for Deep Eddy.

MS: Yes, we didn't think we would have to do it this quickly when we bought the brand. We have a great little facility in Austin. We knew eventually we were going to have to expand it, or build another facility - that came at a much faster pace because the growth we anticipated was much faster. We are in the process of finishing that project - it should be finished in July or August of this year.

Expert analysis

Global American Whiskey Market 2016-2020

Global American Whiskey Market 2016-2020

The production and labeling of American whiskey has to be under the Title 27 of the US Code of Federal Regulations. American whiskey was traditionally produced within the boundaries of the US and can ...read more