Third party producers ‘fundamental’ to industry
The role of third party distilleries is “fundamental” to the future growth of the spirits industry, the CEO of Indiana’s MGP Ingredients has claimed.
MGP Ingredients has strict confidentiality agreements with the spirits brands it creates
Speaking exclusively to The Spirits Business, Gus Griffin, CEO of MGP Ingredients – one of the largest third party distilleries in the US – said such sites provide the “variation and innovation” that drives the sector.
“We supply all aspects of the industry, from small distilleries to regional rectifiers and large multinationals,” he said. “We view our role as creating a wide range of products that our customers turn into brands.
“These are fundamental to the growth of the industry. The more brands there are, the more investment there is, and the more growth we experience.”
Spirits producers of all capacities enlist the services of third party distilleries, which provide neutral grain spirit (NGS), whisk(e)y spirit for ageing and part or fully-aged spirits for finishing, blending and bottling.
According to the US Alcohol and Tobacco Tax and Trade Bureau (TTB), only certain types of whiskey are required to list the state in which they have been distilled on their labels, such as Tennessee whiskey.
All US and European-made spirits must provide a name and address on their labels, but this could relate to the product’s distiller, bottler, rectifier or distributor.
As such, a number of brands are able to keep their third party origins secret.
Recently, Templeton Rye was accused of breaching federal disclosure requirements by leading consumers to believe it is distilled in Templeton, Iowa and not Lawrenceburg, Indiana. A number of reports have cited MGP as the brand’s distiller.
While the brand’s executives agreed to alter its labels, a consumer class action ensued and Templeton was forced to open a “settlement fund” of US$2.5m.
Griffin claims that while MGP will not disclose which brands it works with under a confidentiality agreement, the brands are permitted to list MGP on their labels.
“We make products, our customers make brands and we do not tell them how to do this,” he continues. “The focus on transparency for transparency’s sake misses the mark. Consumers buy brands and they want great tasting products, whether they come from us or someone else.
“Brands really mean something to people and this goes way beyond transparency. Current events will not change how we work with our customers.”
Earlier this year, MGP released Metze’s Select, an Indiana straight Bourbon whiskey, marking its first in-house spirit launch in 23 years.
For an in-depth look at the role of third party distilleries, see the November 2015 issue of The Spirits Business magazine, out now.
