Bourbon Empire

VIKING

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First published by Viking Penguin, an imprint of Penguin Publishing Group, a division of Penguin Random House LLC, 2015

Copyright © 2015 by Reid Mitenbuler

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Excerpts from
Maddaddam: A Novel
by Margaret Atwood. Copyright © 2013 by O.W. Toad Ltd. Used by permission of Nan A. Talese, an imprint of the Knopf Doubleday Publishing Group, a division of Random House LLC. All rights reserved.

ISBN 978-0-698-14540-5

To Lauren

What’s truer than truth? The story.

—old Jewish proverb

There’s the story, then there’s the real story, then there’s the story of how the story came to be told. Then there’s what you leave out of the story. Which is part of the story too.

—Margaret Atwood

I
n 1964, a handful of U.S. congressmen found themselves in an awkward situation. A pending resolution to declare bourbon a distinctive product of the United States sat on their desks, and while most would pass it immediately, a few had reservations. The measure would convert this humble whiskey into an American classic on par with baseball or apple pie, and some legislators needed a little more justification from House staffers before granting this kind of lofty recognition. Of course, bourbon’s modest pedigree wasn’t their biggest concern: behind the measure lurked lobbyists for an industry with a shoddy reputation. During the previous decade, the Justice Department had investigated the predatory and monopolistic business tactics of the handful of companies, known as the “Big Four,” that controlled almost three-quarters of the liquor trade. There had also been a Senate investigation—known as the Kefauver Committee—that had revealed links between Big Four executives and organized crime chiefs dating back to Prohibition-era bootlegging. Surely, a resolution glorifying bourbon as an American original wasn’t great use of political capital. Nevertheless, any misgivings between the lawmakers and lobbyists were eventually smoothed out—no doubt in a way that involved drinking a lot of bourbon—and the resolution was passed.

The next day, news of bourbon’s coronation as an American icon
made a scant media blip on the back pages of a few newspapers, and the resolution was soon forgotten.

A half century later, that legislation has risen above its inauspicious beginnings to become famous. Marketers and food writers love to burnish bourbon’s credentials by reminding drinkers that even Congress, in all its awesome authority, has officially declared the spirit a unique part of America’s heritage. For them, the resolution is a stamp of approval, verifying that the values implied by the frontier iconography found on countless bourbon bottles are inherently American: individualism, self-sufficiency, practicality, and guts. It means that these truths, which we Americans hold to be self-evident, are unquestionable and true. In 2014, after the National Archives loaned the original resolution to the Kentucky Distillers Association for display, the trade group’s president even went so far as to tell a crowd of onlookers that the document was “the Declaration of Independence for bourbon. . . . It’s one of the most cherished pieces of our history.”

But like all good American legends—Paul Bunyan, Johnny Appleseed, the Headless Horseman—the resolution’s story has become embellished over time. In the years following its passage, people started dressing up its language, swapping the dry legalese of “a distinctive product of the United States,” which did little more than clarify bourbon’s place of production, with the punchier “America’s Native Spirit.” This zippier but inaccurate wording would help create a folksy sense of pageantry around bourbon, a little hokey but definitely better for marketing. Today, the catchier but misquoted language has become the norm. In 2007, when Kentucky senator Jim Bunning sponsored a bill to declare September “National Bourbon Heritage Month,” the legislation he introduced to Congress not only misquoted the original resolution, it added sentimental language connecting the spirit to a loftier set of ideals than the original resolution ever intended: “family heritage, tradition, and deep-rooted legacy.”

But regardless of how much bourbon truly deserves these accolades, it wasn’t sentiment or patriotism that inspired the 1964 legislation. It was business, and a cutthroat one at that. The true driving force behind
the resolution was actually a man named Lewis Rosenstiel, head of Schenley Distillers Corporation, part of the Big Four and one of the largest liquor companies in the world. The impetus for his move had happened more than a decade earlier, when Rosenstiel mistakenly evaluated that the Korean War would create whiskey shortages like those suffered during World War II. In preparation, he ordered his distilleries to produce at full blast, helping push total stocks of American whiskey held in storage past 637 million gallons, enough to supply national demand for nearly eight years. When the war quickly ended without the shortages Rosenstiel had anticipated, his surplus gave him control of roughly two-thirds of the nation’s aged whiskey stocks, according to his competitors. This was a disaster from a business perspective—Americans were drinking plenty of whiskey, but demand was dwarfed by supply. Since bourbon evaporates at a rate somewhere between 3 and 7 percent a year while it ages in wooden barrels, much of Rosenstiel’s investment threatened to vanish into thin air before he could sell it.

Rosenstiel had spent tens of millions of dollars on creative ad campaigns and lobbied Congress for changes to industry regulations that would make it easier for him to sell his whiskey. Even though most of his lobbying initiatives were good for the industry as a whole, such as tax breaks, some had met fierce resistance from Rosenstiel’s Big Four counterparts. Whenever these other executives assessed that a looming rule change might give Schenley an unfair advantage—even though it might be good for the whiskey trade in general—they’d undermine it within the Distilled Spirits Institute, the industry’s main lobbying group.

During one such impasse in 1958, over a change in tax codes, Rosenstiel responded by forming his own renegade lobbying organization, which he called the Bourbon Institute. Running the organization for him was retired navy vice admiral William Marshall, a man who had commanded a destroyer at Omaha Beach during the Normandy invasion. Marshall folded the resolution into the lobbying group’s broader strategy of giving bourbon international trade protection so Rosenstiel could expand into overseas markets. In being declared “a distinctive product of the United States,” bourbon would be afforded the same
regional trade designations as scotch whisky, French cognac, and champagne, giving U.S. producers like Rosenstiel a competitive advantage abroad. It would also prevent U.S. merchants from importing products called bourbon from overseas, protecting the domestic market from unwanted outsiders (one of the resolution’s few congressional opponents was indeed a New York politician representing two Manhattan heiresses earning royalties from imports of a cheap “bourbon” made at a distillery in Juárez, Mexico).

Before the 1964 resolution passed, Rosenstiel put in place the rest of his overseas sales strategy. He sent a case of bourbon to every U.S. embassy in the world and spent $35 million on a global marketing campaign. It was all a gamble—bourbon had little name recognition in foreign markets—but Rosenstiel was a solid bet to reverse that trend. By this point, he had been involved in the liquor trade for nearly a half century and hadn’t encountered much failure. He was a tough operator who had made his bones in the industry during the lawless years of Prohibition, the same decade when U.S. president Calvin Coolidge declared, “The chief business of the American people is business.” That quote would eventually become famous and no doubt was still ringing in Rosenstiel’s ears when Congress passed the 1964 resolution. Of course, by that point this corporate titan was already one of the richest men in America.

 • • • 

Like no other American product, bourbon embodies capitalism—a word that’s dirty to some, beautiful to others, but has nonetheless shaped our political and cultural life as much as it determines how we do business. Early styles of American whiskey, bourbon among them, allowed farmers to preserve the value of surplus grain crops by converting them into spirits. This liquid soon became the frontier’s de facto currency, knitting together America’s early economy. Then, when the question of taxing these spirits erupted during the Whiskey Rebellion of 1794, the ideologies of Alexander Hamilton and Thomas Jefferson clashed in a battle to define the soul of American business. While the debate roared,
the trappings of a cottage industry gave way to factories and, according to business lore, the term “brand name” entered the American lexicon as distillers began differentiating themselves from one another by branding their names onto the ends of whiskey barrels. The evolution wouldn’t be complete, however, until bourbon, that spirit born on the frontier, would come of age on Madison Avenue. The style of modern marketing it helped create would define the system of commerce that America would eventually spread across the globe.

But just as bourbon helped shape U.S. history, it was also shaped by it. The spirit’s recipe was determined by the migration of Americans drifting west to places where corn, its main ingredient, was more prevalent than the grains primarily used in other whiskey styles such as rye. Most of bourbon’s flavor also comes from aging in wooden barrels, which was an outgrowth of America’s shifting trade patterns: as the empire expanded, people noticed that whiskey shipped in barrels on relatively longer voyages tasted better after absorbing flavors from the wood. America’s Industrial Revolution brought scientific advances that would change bourbon, just as other technological innovations today keep doing. Finally, there’s government lobbying. This strange art—which helps guide the “invisible hand” that economist Adam Smith credited with building the wealth of nations—always has, and always will, affect whiskey by influencing production standards, regulations, and profits.

None of this history, however, is brought up in the dry language of the 1964 resolution. The declaration doesn’t explain how bourbon is the tale of a nation told on a condensed scale: the humble origins, ambition and promise, innovation driven by necessity, the dizzying wealth, corruption, downfall, and redemption. Nor did the legislation mention that textbook history and the carefully cultivated myths of the whiskey industry are often overshadowed by stories as shocking as they are impressive: the nation as it really works, built by men like Lewis Rosenstiel as well as the frontier icons you find on many bourbon bottles. We hold up bourbon as a mirror of the America psyche, but the images it reflects—seen on whiskey labels that portray our evolving attitudes toward race, class, sex, and religion—always confound expectations.

Other drinks have concrete images—beer is for the everyman even when it’s expensive and hyper-crafty, while wine is typically considered sophisticated and swanky even when you buy it at a gas station. Bourbon, though, is a shapeshifter. It can be a refined drink or it can be rough, depending on how it’s served and who’s drinking it. Sometimes it conjures up images of old men sitting around in deep leather chairs, power brokers who spend their time in rooms decorated with oil paintings of other old men with good posture and impressive facial hair. At other times it makes you think of cowboys getting arrested—one fun but probably untrue bit of drinking lore even claims that the expression “a shot of whiskey” originated from how much whiskey cowboys got for trading a round of ammunition at the saloon.

Of course, these old stereotypes are fast changing. Today, women have cracked into the old boys’ club and are just as likely to drink whiskey as men, while the rowdy cowboys are replaced by whiskey geeks who sniff cautiously at the edges of their glasses before dutifully noting aromas of “hibiscus,” “buttery oak,” or “stewed fruits” in their tasting notebooks.

Speaking of tasting notes, voluminous pages of these can be found in many other fine books that scrutinize and rank individual brands. These sources are a helpful first step for understanding whiskey, but I ultimately believe that examining the spirit’s history is the best guide. Rankings are subjective, arbitrary, and vulnerable to the industry’s marketing efforts. Certain qualities—the length of time a whiskey is aged in a barrel, proof, the grains used in different recipes—have come to be more appreciated than others. And why is that exactly? The answer is for reasons aside from what actually gives us the most pleasure. We taste with our minds as much as our senses, and perceptions of status and image—the products of economics, politics, and culture—dictate many of our “rules” about connoisseurship.

For instance, when Lewis Rosenstiel was lobbying for the 1964 resolution, he was also investing $21 million ($167 million today) on ad campaigns to reeducate the palates of drinkers toward particular whiskey styles of which he held vast surpluses. Some of it was good, but
some of it wasn’t—it didn’t matter, he simply needed to get rid of the stuff. Nevertheless, you can still see the fallout from those ad campaigns today when celebrity chefs or the other various apparatchiks of the foodie-industrial complex offer questionable advice about what to buy or what is the “best.” Much of this talk is just white noise, doing little to demystify the array of bottles on store shelves today. Knowing the history, though, and how some of these “rules” came to be, clears the marketing fog and helps us make our choices more objectively. Fortunately, the lessons are usually refreshing, revealing the best bottles to be hidden gems, and not always the ones that are the most expensive or discussed.

 • • • 

Even though the true origins of the 1964 resolution aren’t particularly romantic, the document’s sentimentalized meaning has become today’s reality. This has helped drive bourbon’s resurgent popularity this century, a comeback that is often credited to the drink’s “authenticity,” a term used to describe unbroken heritage and trueness. We often imagine that bourbon connects us to a past that was somehow less complicated, and we’ve turned to it for relief from modern confusion. Bourbon’s sales this century have spiked to their highest level since Rosenstiel’s 1964 resolution, and I don’t think it’s coincidence that the uptick has come during times of confusing change. The economy is booming, but the new industries are tearing asunder the old ones and leaving inequality in their wake. Our political leaders are smart products of the meritocracy, but Washington seems more angry and gridlocked than ever. And while technology today better connects us, it has also managed to disconnect us, replacing actual conversation with the numb glow of tiny screens. Some pundits speculate that these changes spell the decline of the American Empire, but I have no idea if this is true or not. What I do know is that we could all probably use a drink of bourbon right now.