Stuart Maclean Ramsay meets Heaven Hill Distillery President Max L Shapira to find out how they keep it in the family and preserve tradition at one of America's premier bourbon producers
The sharpest tack in the box”. That is how a fellow blue blood bourbon distiller describes Max L. Shapira, President of Heaven Hill Distilleries. Founded in 1935 by Gary, Ed, George, Mose and David Shapira, the company operates today under the direction of second generation family member Max Shapira. Harry Shapira, Max’s cousin, is Vice-President-Treasurer.Heaven Hill is America’s largest independent, family-owned marketer and producer of distilled spirit products. It is the second largest holder of ageing bourbon whiskey in the world, with more than 600,000 barrels currently ageing in its traditional, ironclad warehouses in and around Bardstown, Kentucky. The inventory accounts for approximately 17% of the world’s future supply of bourbon. The company sells bourbon in nearly 40 countries around the world and employs close to 400 people in Bardstown and Louisville. Its storage, bottling and distribution, as well as sales and marketing offices, occupy the same farmland in Bardstown once owned by the company’s namesake, William Heavenhill. In 1999, the company bought the historic Bernheim Distillery in Louisville from Diageo PLC, and this facility is the sole location for the production of its bourbons.Heaven Hill’s portfolio of specialty bourbons includes three whiskies that belong in the cabinet of every serious drinker: Elijah Craig 12-year-old, Evan Williams Single Barrel Vintage and Very Special Old Fitzgerald 12-year-old. In addition, the company distills Henry McKenna, Fighting Cock, Rittenhouse Rye, and imports and markets Isle of Jura single malt, Kilbeggan and Tyrconnell Irish whiskey in the United States.I was in Bardstown last summer, to attend the official 1992 de-bunging of the always spectacular and splendidly affordable Evan Williams Single Barrel. The bung was removed outside ‘My Old Kentucky Home’ in Bardstown by Parker Beam, seventh-generation Master Distiller at Heaven Hill, then we headed back to Parker’s farm for some pulled pork and an unforgettable vertical tasting of all six vintages of Evan Williams. By 1am the tasting had evolved into a horizontal event, but we were up early the next day for a grand tour of Nelson County’s silent distilleries, hosted by Bourbon historian Sam Cecil. Next stop was the Kentucky State Fair in Louisville where I was a judge in the 16th Annual Evan Williams Bourbon Cooking Contest, sampling 40 dishes prepared with the eponymous whiskey. After a quick foray to the country ham and Burley tobacco displays, dinner was served in the venerable Oak Room of the Seelbach Hilton; an eight-course gastronomic marathon with Heaven Hill bourbons married into and with each course.‘Busthead’ is the charming Kentucky expression that would describe my general condition when I met with Max, looking sharp as a tack, the following morning. With the distinguished backdrop of a plethora of painted Shapiras gazing down upon me from the walls of the company boardroom, I proceeded with interviewing Max L Shapira, legendary sharp tack.Whisky Magazine: How did the Shapira family originally get involved in the bourbon business?Max Shapira: By accident. In 1935 my father and his brothers were businessmen involved in a chain of retail clothing stores and my father was operating part of the business here in Bardstown. The whiskey industry was shut down until after Prohibition; it became legal again and all of a sudden it was like a horserace and all the horses are at the starting gate. The Government rings the bell and you’re off to the races. My family was approached by people who had experience in the distilled spirits industry before Prohibition. They said to my father, “Prohibition is ending. You live here in Bardstown. You’ve been a reasonably successful business person. Would you like to invest? Except, by the way, Mr. Shapira, we forgot to tell you: We’re still at the height of the great depression; we don’t have anything to sell for at least three, if not four years; we don’t know how much whiskey to produce because we don’t know what the demand will be in three or four years; there’s going to be a lot of other companies doing the same thing; we have no brand to put on the whiskey; and, finally, every barrel of whiskey that goes into the warehouse has got to be paid for today.”Now who in the world would enter into a crazy business like that? And my father was a very conservative person. It was a highly speculative venture and pretty much like somebody’s friend or relative coming to them a few years ago and asking to invest in a dotcom venture. But the bourbon industry was actually more risky because the dotcom people had something to sell. We didn’t. Money was loose a few years ago and dotcoms could start selling in three to five months. It turned out a lot of them couldn’t make money at it.Anyway, after a short period of time the people with all the experience decided they didn’t want to continue in the project. They were either going to shut it down, sell it to somebody else, or sell it to the other investors who happened to be our family. With virtually no experience and no knowledge of the industry the family bought out the other people and without knowing a barrel from a box, they just learned the business. But they were able to hire great expertise; from Master Distillers to production people. It must have been a real challenge to say the least.WM: Heaven Hill is still independent and family owned. Have you ever thought of selling the company?MS: No. I have been here since 1971 and I don’t believe that subject has ever been broached. Our concept has been to expand in the bourbon category and in other categories as well. Independence has been extremely important to us. We think it brings a different perspective to the way we conduct our business, to the way we conduct our relationships with our customers, both domestic distributors and importers abroad, as well as the ultimate consumer. Probably the most important thing that has happened to the company in the last five years, maybe even in the last generation, is that we have now added another generation. My daughter, Kate, and son-in-law, Allan Latts, joined the company about three months ago. They both have tremendous backgrounds, they know how to work with people and they have the business at heart. It will bring a new perspective on how we do things.WM: Could you give us the Max Shapira version of bourbon history?MS: The bourbon industry has shot itself in the foot about three to four times in the last century. There’s been shortsightedness, bad luck and government intervention. Before Prohibition, the people who made whiskey were farmers who had turned commercial. There used to be 25-30 distilleries around Bardstown alone.The first round of consolidation began after the First World War – the companies wanted stocks of whiskey. With Prohibition, the industry lost history, heritage and inventory. It was smacked down to extinction. If there was whiskey after Prohibition, it was too old for the mass consumer. And after Prohibition, bourbon was brought in and sold at young ages. In World War II, the industry had to make industrial alcohol for the war effort and distilleries were shut down. During the late 1940s, there was an oversupply of whiskey but the industry was growing in the 1950s and 60s, even though there was still too much being produced. The bourbon companies thought demand in the United States would go on forever, and they focused inwardly, whereas Scotch dominated every market outside the United States.In the late 1960s and 70s there was over capacity and an excess of inventory and the market peaked, then declined through the 70s and into the early 80s. Then came the rise of vodka and the industry finally woke up. The spark was the Japanese consumer – this was the first interest in bourbon outside the United States, the first inkling of the popularity of bourbon, even when the market in the United States was declining.We finally discovered a whole world outside of the United States. We realised that bourbon is a “can do” spirit; it has history and tastes good. So an export demand was built, especially in the Far East and Japan in particular. Also, the industry realised that the product was unique and if properly packaged could be of interest to American consumers. This is the age of specialty bourbon that falls into three categories: single barrel, small batch and extra-aged. Whiskies have become stylish and have unique presentations; they are known now for their ages and proofs. Inventories are now under control and bourbon is the fastest growing spirit in the world. Yet only 10 or 15 years ago, this was an insular industry. The industry knew good bourbon was there, but we really didn’t know what we had. We came to a realisation that our product was just as good as any country’s spirit, but we had to present bourbon in a way that makes it appetising to the consumer.WM: Has the popularity of specialty bourbons helped the category?MS: The world of specialty bourbon has reinvigorated the category and developed interest, and this interest in bourbon is surpassing single malt Scotch. The different styles are good for the industry.WM: How many bourbon producing companies are in Kentucky?MS: There’s eight companies, including ourselves: Jim Beam, Barton Brands, Buffalo Trace, Allied Domecq which owns Maker’s Mark, Pernod Ricard which owns Wild Turkey, Brown-Forman, a publicly held company, and Seagram, which is getting out of the business. We’re the only family-owned producing company in the whole state.WM: What’s special about bourbon?MS: Today, everyone makes a good whiskey. Bourbon is the most exclusive, the most difficult whiskey because it has to be made to the most exacting standards and you have to get it right the first time. It has to be perfect before and after it comes out of the barrel. There’s no colour or flavouring and you can’t doctor or change it. It’s an entirely natural product made up of water, grain and yeast and is among the world’s great whiskies in taste, aroma and colour. You can enjoy it with water and ice, and it’s highly mixable, also, yet the traditional flavour still comes through.WM: Are young people drinking bourbon?MS: Young customers are interested in bourbon, and that’s who you want for your customer. The consumer today is interested in trying a variety of different things – I’m not sure there’s such a person as a young, avid bourbon drinker who says “That’s all I’ll have for an alcohol beverage.” Most consumers today are multi-taste oriented. It’s not uncommon in the course of an evening for them to have two or three different kinds of distilled spirits. But the mere fact that they want to experience different tastes and different styles really augers well for the industry, because the industry has a broad variety of different tastes and styles. I find it interesting because in many areas the increase in the interest in bourbon whiskeys is rivalling or even surpassing the interest in single malt Scotch. That’s a really important coup for the bourbon category.WM: How would you describe this new consumer?MS: Many of the things that motivate consumers here today are the same things consumers abroad are interested in. Today’s consumer is a different consumer than he or she used to be. They’re probably better educated; they are interested in challenges and experimentation and they have a wide variety of different tastes. They want to know the background to things they do, things they eat or drink. They want education: how is it produced and what are the characteristics that make it different from others.
That presents challenges from a marketing point of view. Today education is extremely important, particularly in the specialty bourbon category. And it’s especially true abroad, where bourbon is still in its discovery stage. Despite the inroads we’ve made, the category is still in its infancy. Due to lack of knowledge, people are not sure how to consume it. They’re so different from how we do it here in the United States. So the consumer has to adapt to our tastes, but we have to adapt to their tastes too. We can’t be tied into some rigid formula that bourbon can only be consumed with water, or neat or on the rocks. In some cultures they drink it with orange juice; other cultures enjoy it with Coca Cola.WM: What is unique about Heaven Hill?MS: It’s a combination of a whole lot of little things. The two most important factors are our products and our people, and we’re extremely proud of this and our adherence to quality.Under our continuity method, whiskey is entered into warehouses every month, and we’re the only US distillery to do this. Other distilleries close for several months each year. We buy grain from local farmers within a 60 to 80 mile radius and have relationships with these farmers that go back for generations. Our special strain of yeast goes back eight generations and our whiskey is aged naturally in open rick warehouses.Higher proofs and older ages are the signature of Heaven Hill – there’s more flavour and complexity in a whiskey if it’s a little higher strength.Our Master Distiller is Parker Beam, a seventh-generation Beam. His father was Earl who worked here at Heaven Hill. Parker’s grandfather and namesake was Park Beam who was a brother of James Beauregard Beam, better known as ‘Jim’ Beam. Parker started here in 1960 and took over as Master Distiller in 1975. His son, Craig, started working here in 1982.And we’re an independent, family-owned company. There’s no publicly held stock at Heaven Hill, which means there’s no-one looking over our shoulder. It gives us the leeway to do what’s right.WM: Any parting thoughts?MS: I believe that at Heaven Hill, where sales, marketing, storage, bottling and distribution are in the same facility, you can reach out every day and touch a barrel of our whiskey. The sales and marketing people can talk and exchange ideas in the hallways. Great quality is essential, but people need to breathe and consume passion and transmit this camaraderie worldwide. Some say that Heaven Hill is out of date because we combine the old ways of doing business, but we believe that our relationships with our suppliers and distributors, relationships that go back 50 years, is critical to our success.With regard to the bourbon category, it is a truly indigenous product that today enjoys the prestige and taste on par with the very best spirits in the world. We can hold our head up with pride alongside anyone. It wasn’t too many years ago that people turned their nose up at this product. We were losing customers right, left and centre as an industry, and that has turned around on a dime.There’s a new era of respect for the industry and yet it is still largely in its discovery stage with consumers. This means things can only get better, and the resurgence and rekindling of interest here in the United States is the best of all possible worlds for us.