History

Prohibition

The effect it had on the Bourbon industry
By Dave Waddell
Given Bourbon's current dizzying status as the world's brown spirit darling, thoughts of an industry put to almost death by National Prohibition have the unreal quality of a bad dream. The industry is worth a billion dollars plus, in exports alone. In Kentucky, source of near on all of the world's Bourbons, there are more barrels in maturation than there are Kentuckians. America today is home to hundreds of distilleries. Far away and seemingly the stuff of history books, Prohibition's a faint blip on the otherwise seemingly forward motion of America's 350 hundred odd year relationship with whiskey.

Nothing, of course, is ever so clean cut. The National Prohibition Act came into effect on 17 January 1920, implementing the 18th Amendment to the American Constitution, prohibiting the manufacture and sale of 'intoxicating beverages'. Much popularised in histories drawing various pictures of an America whacked on hooch and homemade wine, the birth of organised crime, porous borders penetrated by Canadian and Scottish sponsored bootleggers, and the seemingly counter intuitive rise in per capita spirits consumption, National Prohibition effectively pulled the plug on a distilled spirits industry that in 1919 had been worth $365 million in taxes.

Meaning, the majority of the turn-of the-century's 3,000 odd distilleries closed their doors, never to reopen again. Save the few rich or lucky enough to sit it out, either licensed to produce government sanctioned alcohols or already thinking about what would come next. Prohibition had the effect of all but extinguishing a generation's worth of distilling talent, concentrating at least three quarters of the remaining distilleries and brands in the hands of four conglomerates (National Distillers, Schenley, Hiram Walker, and Seagram). All of these companies had variously and relatively super limited old stock. Left to nurse its nascent product lines through the Great Depression, the industry had barely got on its feet before running slap bang into World War II, whereupon it was wholesale co-opted for the war effort, and after which, and for much of the rest of the century, any growth was qualitatively measured against top-shelf Scotch and what was seen as light, adaptable Canadian.

In short, ably assisted by depression and war, Prohibition did for 20th Century American straight whiskey. This is an old and already well-told story, so I'll be quick. It's not that Bourbon didn't find its way back into the bars and homes of post-war America. It did, especially between 1945 and the 60s, when it grew strongly, the peacetime dollar a proper boon. It's just that, during Prohibition and beyond, with very little decent old school and well aged Bourbon available, the habits and tastes of a generation of American whiskey drinkers had changed. Scotch ruled the roost, well aged Canadian stock fuelled the cocktail renaissance, and Bourbon, says whiskey writer Chuck Cowdery, was perceived as a 'workingman's drink'. It wasn't that it was bad. On the contrary, as any old Bourbon bottle fan will tell you, a great deal of it was good, some very good, some out of this world. Stitzel-Weller had ploughed its own legendary furrow since 1935. National and Schenley were home to some wonderful whiskies. Many a distiller's roots, the likes of the Beams, stretched way back, their whiskies full of pre-Prohibition type character. However, with one or two notable exceptions, it wasn't sold as good - or great, or even properly. Rather, and especially from the 1960s, as Sazerac President and CEO Mark Brown says, for the Big Four, it was all about shifting units: "Sell it like a Ford, a GM or a Chrysler car. Sell it cheap, stack it high, build volume."

The sum of which was both strategy panic on the whisky type front and, as Brown notes, a summary castrating of the character of Bourbon itself; for Brown, the 1960s production standardisation and efficiency drives, as evidenced by a switch from old school knowhow to that of 'chemists and engineers', created a style 'technically sound, but consistent, all the same, and utterly devoid of personality, character and charm.'

Obsessed with blended Scotch's premium status, with Scottish and Canada based production methods, and compromised by the fact that their interests included significant Scottish and Canadian assets, the big producers showed little interest in pushing Bourbon as different and bold and full of a specific character, preferring to develop their own home grown versions of the imports, experimenting first with blends, and later with so-called 'light whiskey', made from higher proof distillates and aged in used barrels. The former, a short sighted financial success, saw American blended whiskies take roughly 18 per cent of the entire American spirits market by 1971.

The result: between 1971 and 1981, Bourbon sales fell by 33 per cent; Scotch rose by 9 per cent; and Canadian stormed the citadel, sales rising by 49 per cent - all during a worldwide slump in whisky sales, and in its most valuable market.

I'll save you the rest. Suffice to say, welcome to Bourbon's Dark Ages. The category went into a generation-long nosedive, the industry, to quote Chris Morris, Master Distiller at Woodford Reserve, 'on autopilot', the Bourbon lake (whisky in bond) a veritable and increasingly unsellable sea.

Young Americans, turned on and off by the hollow chutzpah of a seemingly old fashioned consistently light-bodied brown spirits, had moved on to the new real light thing, namely gin, white rum, tequila and vodka.

The conglomerates began to rationalise. Aspects of production were shed or further accelerated. Operations were shared across multiple sites. A raft of heirloom distilleries bit the dust. Old recipes were abandoned, forgotten, lost. Price wars over bottom shelf space further diminished profits and good faith. In short, there took place an organised bloodbath, described by Kathryn Rudie Harrigan in her 1983 analysis as the industry (as it had stood since Prohibition) being in 'endgame'.

By 1994, Bourbon was on its knees, a great American tradition of whisky making eventually reduced to ten major distilleries, a clutch of micro-distilleries, and a reputation worth not very much.

To blame all this on National Prohibition idealises that which came before, and makes excuses for what came next. Historically, Protestant America had always had a somewhat ambivalent relationship with alcohol. While largely responsible for its introduction, many of its denominations made a virtue of limited consumption. Typically, antebellum America prohibited the sale of alcohol to the disenfranchised, the disempowered and the enslaved. After the Civil War, the strength of various abstinence movements and their 'rent seeking' allies was such that 20 states had gone dry by 1915, five years prior to

National Prohibition.

In this respect, much of what came about as result of the conditions of Prohibition's repeal was necessary, particularly the industry's decision to self-regulate, the newly-founded Distilled Spirits Institute stipulation that bottled - and not barrelled - Bourbon be the only legal tender on the open market, a proper game changer.

As for mid-to-late 20th Century Bourbon losing the plot, given the rampant success of American straight whisky's current renaissance, it's worth speculating as to what a similarly inspired 1970s industry wide back to basics approach - emphasising quality, complexity, difference, the notion of the premium - might have done to change the course of the next 30 years.

Granted, but whether we accept that Prohibition had been a long time coming, or know full well that a Bourbon bottled in circa 1900 does not necessarily make it good let alone great, or believe that the 1960/70s represents an era of unabashed industry suicide, we're still dreaming.

Not one of the big producers appears to have properly recognised the quality of either the whisky slumbering in their warehouses or the maker on the payroll. For that, we would have to await the flowering of the idiosyncratic policies of Makers Mark, the unexpected and abroad successes of the likes of Four Roses and Blanton's single barrel, the distiller-centred rebirth of the big, fat, mouth chewing Bourbon, as predicated by a return to a bolder approach to the vagaries of production, by the exponential rise of the craft distillery, and by the championing of the differential, including higher strength bottlings, different strengths for the same expression each year, and single barrel and small batch offerings.

So, to finish: a celebration and a mild caveat to that celebration. The wait's over - and has been for at least six years. Bourbon's back, and with it the rest of American straight whisky. It outsold Canadian in 2010, for the first time since before Prohibition.

And yet, wary friend, that caveat: It is still true and extraordinary to say that in 2016 America, the states of Kansas, Tennessee and Mississippi remain 'dry-by-default'; that one third of states continue to exercise monopolies over the wholesaling and retailing of whisky; that a total of some 33 states allow county law the lead as to whether to variously prohibit sale, consumption and possession of either alcohol as a whole or spirits in particular; and that of this final category, one is none other than Kentucky itself, home to 120 counties, a near third of which are bone dry. The irony escapes no one, least of all the Kentuckian distiller.