Buffalo Trace to get $200m distillery expansion

20th May, 2016 by Amy Hopkins

Sazerac is to plough US$200 million into its Buffalo Trace Distillery, which the US producer admits has been struggling to meet soaring demand.

Buffalo-Trace

Buffalo Trace Distillery is to receive a US$200m expansion in order to tackle the “real problem” of Bourbon shortages

The phased investment will take place over the next seven years and will expand Frankfort-based Buffalo Trace’s cooking, fermenting, bottling and warehousing operations, in addition to acquiring more land.

As part of its fourth annual Bourbon supply update, Buffalo Trace said its current inventory of Bourbon old enough to bottle is “marginally better” than three years ago.

“We’re still looking at shortages across the board for all of brands, and although the volumes are increasing, allocations will continue,” said Kris Comstock, distillery spokesperson.

Buffalo Trace will continue to allocate its Bourbons on a monthly basis across the US to ensure each state receives some Bourbon each month.

Comstock added: “This is not some marketing tactic to scare consumers to buy more, or something we are making up. We wish we had distilled more years ago. The shortage is a real problem. We get requests for more daily. Believe me, I wish we had more to sell too.”

Warehousing project

Buffalo Trace has already acquired buildings adjacent to its distillery and converted them back to their “original purpose” as whiskey warehouses, called ‘T’ and ‘U’, which hold 50,000 barrels each. While ‘T’ is completely full, ‘U’ is expected to be full by June 2016.

Two more buildings that were sold off in the 1980s to be used as offices have been converted into warehouses (‘R’ and ‘S’) with capacity for 100,000 barrels in total, which will be filled over the next 12 months. “It is very gratifying to see the buildings once again being used for their original purpose,” said Mark Brown, president of Sazerac.

Warehouses ‘N’, ‘O’ and ‘P’, which have stored finished goods for a number of years, will be filled with new Bourbon barrels now that construction is complete on the distillery’s new distribution center, which opened last summer. Each floor in those warehouses will hold 10,000 barrels.

In addition, Buffalo Trace will begin building new barrel warehouses in 2017 on 200 acres of land it purchased a number of years ago. A total of 30 warehouses will be built on the site, the equivalent of one new building every five months over the next 10 years.

In its supply update, Buffalo Trace addressed a number of “rumours” it claims are false, including the discontinuation of Elmer T. Lee or Weller 12; a number of expressions, including Eagle Rare 10 Year Old, becoming NAS; and the thought that Buffalo Trace is shipping a high proportion of its whiskeys to China and Japan.

The distillery said that while there will be “marginally” more Bourbon this year than 2015, allocation will continue to “with no foreseeable end in sight”.

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