240 – Toasting, Charring, and Selling Oak with Paul McLaughlin of Kelvin Cooperage

Bourbon

February 13, 2020

Today, on the podcast we talk with Paul McLaughlin. He might not be known to you yet, or his cooperage, but the story he shares and how they hone their craft is like no other. We had the opportunity to check out Kelvin Cooperage and get a behind the scenes tour of their barrel building process. It’s amazing how everything is still very labor intensive and they use machines and tooling that have been part of their process since the beginning. We dive into toasting on a natural fire and what makes their barrels different from other cooperages around the country. We also discuss the economics of a cooperage and how they are trying to satisfy the growth of a world-wide demand for used barrels.

Show Partners:

  • The University of Louisville has an online Distilled Spirits Business Certificate that focuses on the business side of the spirits industry. Learn more at uofl.me/bourbonpursuit.
  • Barrell Craft Spirits has won a few medals at some of the most prestigious spirits competitions out there, but don’t take their word for it and find out for yourself. Learn more at BarrellBourbon.com.
  • Receive $25 off your first order at RackHouse Whiskey Club with code “Pursuit”. Visit RackhouseWhiskeyClub.com.

Show Notes:

  • This week’s Above the Char with Fred Minnick talks about faulty pipe systems at distilleries.
  • Where are you from?
  • How did you get into the barrel making business?
  • How did you get into bourbon?
  • How does Kentucky compare to Scotland?
  • When did you join the family business?
  • Was it hard to have your brother as your boss?
  • How is your process unique?
  • What is the reasoning behind toasting?
  • Tell us about the natural fire.
  • How long does it take a new cooper to get the hang of the process?
  • Do you rotate positions?
  • Do you have a high employee turnover?
  • How many used barrels are you buying per day?
  • What other barrels do you get besides bourbon?
  • What’s the craziest barrel you’ve made?
  • Tell us about selling barrels in Asia and Japan.
  • Let’s discuss the economics of barrel making.
  • What is your quality control process?
  • What makes your cooperage appealing to customers?
  • Is it harder to make a 25 gallon barrel?
  • How do you see this business growing?
  • How do you source oak?
  • How do you determine pricing?
  • What about secondary finishing?
  • Where do you see the business in 10 years?

0:00
If you have a bachelor’s degree and live anywhere in the United States, there’s now a way for you to take your bourbon education to the next level. The distilled spirits business certificate from the University of Louisville is a six course online program that will prepare you for the business side of the spirits industry offered by the AACSB accredited college of business. This certificate is taught by business professors and industry leaders from Brown Forman beam Suntory jack daniels and more. join this one of a kind experience and prepare for your next adventure. get enrolled into this online program at U of l.me. Slash bourbon pursuit. Literally guys yelling the barrels over hand putting them over top of the fire. Yeah, and they kind of like stepping back a few seconds letting it do it, but

0:46
it’s a tough job in the summer like jumping. They’re gonna smell like 10 huge fire, scared chiller.

0:53
I feel like I’d be like, keep my arm here.

1:08
This is Episode 240 of bourbon pursuit. I’m one of your host Kenny and I’ve got this week’s bourbon news roundup for you. Woodford Reserve is releasing its annual limited edition Hyperloop expression. Woodford Reserve batch proof. This year it’s bottled at 123.6 proof and this expression is part of the annual masters collection series. Woodford Reserve is proprietary batching process for this release is done by blending barrels into a batch and bottling the whiskey at its actual proof straight from the barrel. The batch proof is crafted using the same grain built in process as Woodford Reserve. And this limited edition collection is available in select us and global markets with a suggested retail price of 129 99. There’s a bill working its way through a Olympia that would address what seems like a monopoly on selling liquor in Washington State and it’s House Bill 22 04 in 2011, the state liquor stores in Washington State let private businesses sell alcohol, it came out of initiative 1183. But some big corporations like Costco in some grocery chain stores seem to get the bigger benefit out of the initiative because in order to sell spirits, you needed to have a location with over 10,000 square feet. A new bill would actually let smaller businesses sell spirits. And last week that bill passed out of the house commerce and gaming committee on a 10 to one vote. So soon you can get your bread, milk, beer and bourbon at a convenience store across Washington State. And Australian couple stuck on a quarantine cruise ship with cases of Corona virus on board have managed to get their wine delivered by drone posted on Facebook by Jan and Dave been skin on February 7. The couple provided an insight into the life on a quarantine diamond princess cruise ship off the coast of Japan and more specifically Getting wine onto the ship. The Naked Wine Club received the request from the couple who wanted to know if they could get their wine delivery while stuck on a ship. And to everyone’s surprise, they accepted. The couple posts stated that two cases of wind were delivered by drone to the ship and said that the Japanese Coast Guard had no idea what was going on. I don’t know about you, but having bourbon delivered by drone is something that I can start getting behind. A Tokyo restaurant chain has opened up a small pub in one of the city’s busiest train stations. But it has a robot bartender serving drinks to commuters on their way home from work called xerocon. Robo tavern. The bar is located in Tokyo is I keep a train station and is owned by your own gataki a company that operates a chain of casual restaurants for after work drinking around the country. This pilot program will run for about two months. But here’s the kicker consumers will first pay for the drinks at an auto I made a payment kiosk and receive a QR code of the receipt. you scan that receipt at the robot, and it takes about 40 seconds to pour a glass of draft beer, or a little under a minute to deliver a cocktail. But also, the robot has a set of cameras built into it screen to monitor the emotional state of customers tracking whether they’re happy, or if they’re growing impatient. So look out bartenders, the robots are coming. vending machines that dispense spirits are becoming more common around the country, but mostly the establishments such as restaurants or bars that already sell alcohol. Anheuser Busch InBev recently introduced beer box for use at concerts, sports arenas and music festivals. And back on January 31, the first District Court of Appeal in Florida overturned the state’s 2017 denial of a residential condominium to sell beer and wine in vending machines. This was originally met with criticism from several traders including the beer industry of Florida, Florida beer wholesalers, so Association in the Florida independent spirits Association, but the court struck down the divisions order and that nothing in plain language. afforda law prohibits the sale of alcoholic beverages through automated dispensing machines. So who knows, that can get your bourbon soon through vending machines. Now today on the podcast, we talked to Paul mcglothlin. He might not be known to you yet or his cooperage. But the story he shares and how they hone their craft is like no other. We had the opportunity to tour Kelvin cooperage and get a behind the scenes tour of their barrel building process. It’s amazing how everything is still very labor intensive. And he’s using machines and tooling that have been a part of their process since the early 1900s. We discussed how he got into the family business of running cooperage from Scotland to Kentucky, and how he dives into their process of toasting unnatural fires are really what makes their product different than any other to purchase around the country. Then we dive into some of the fun part about the economics of the cooperage. And what they’re doing to satisfy the growth of worldwide demand for used barrels. Now, make sure you also follow us on social media. And you can see some of the pictures and videos from our visit to Kelvin cooperage. And if you aren’t a supporter of the podcast on Patreon, I encourage you, please go and check it out. In the past two weeks, we’ve released two Elijah Craig barrels, a 1792. foolproof and a willet seven year ride that we all selected with our Patreon community. These are now all sold out. But you don’t want to miss your chance to get your hands on the next one. So view all that we have to offer a being a part of this [email protected] slash bourbon pursuit. And if you’re listening on Apple podcasts right now, make sure you hit that subscribe button because you’re probably missing out on all of our bonus content. Every Tuesday we released a two minute podcast called whiskey quickie. And if you aren’t subscribed, you won’t see the bonus content that we post But hey, if you’re listening on Spotify or I Heart Radio, you’re all good. And thanks for being a listener. All right, let’s get on with the show. Here’s Joe from barrel bourbon. And then you’ve got Fred minich with above the char.

7:13
It’s Joe from barrell bourbon. Our Bourbons have won a few medals at some of the most prestigious spirits competitions out there. But don’t take their word for it. Find out for yourself. Use the store locator at barrel bourbon calm.

7:26
I’m Fred MiniK. And this is above the char. Listen, it happens sometimes we buy a bottle of bourbon we get home we taste it, and it tastes like musty corn or stale potato chips or drywall or some type of plastic or chemical. And we just completely dismiss that brand. Whether it’s new or something we’ve been tasting for a long time we taste it in that moment. We’re like yuck, I don’t want it. Now, I’ve been doing this long enough to know that there’s a lot of pieces that go into making American whiskey from the time That the whiskey goes into the barrel, the time it gets into your bottle, there’s probably hundreds of factors that could influence the flavor. Things that you don’t even think about. Like for example, there was a distillery that recently found hunks of corn in their pipe system. So as it was, they were pumping it into the steel, they found little hunks of corn that were getting stuck a kind of like a collar part. And what would happen is, is that corn got moly, and it started spewing out all kinds of unwanted bacterial flavors and notes and it took them a while, a few bad batches before they figured out the cause of it. In fact, when you go to a distillery and they’re on shut down, you can’t take a tour. Chances are they found something like that. They find it quite frequently. Very recently, I was at a distillery I’m not going to name who was because it’s a new distillery. And right before their bottling line, I learned that they had this PVC pipe before the the whiskey got to the bottle. When I was tasting it out of the barrel, I was like my goodness, this is fantastic whiskey, especially for young distillery. And then when I tasted it out of the bottle in their in their tasting room, it was absolutely different whiskey I tasted this really rough edges plastic note. And I told the distiller this and he said, Well, you know, it could be this PVC pipe that we have here. And I was like, I’m not telling you that it’s that or it’s not that all I can tell you is that I taste plastic, and he changed it. Now, look, I hope that changes the flavor there. And it was indeed the plastic that was causing that and that distillers no longer going to have to worry about it. But the reason why I point this out to you is we tend to be very critical and very judgmental about the whiskeys we drink and we tend to stay focused on things like warehouses, mash bills East but the fact is, there’s a whole A lot that goes into making whiskey and those mechanics, those repairmen, all the people who touch every single inch of that distillery, they all make an impact on the flavor that you taste. And that’s this week’s above the char Hey, if you have an idea for above the char hit me up on Twitter, Instagram, Facebook or my website, Fred MiniK calm until next week. Cheers.

10:28
Welcome back to the episode of bourbon pursuit the official podcast of bourbon, Kenny and Ryan here on the Shively side of town the lively Shively but our local owner, but I mean this is a this is a part of town and in not only that, just as it’s just on that level, but you know, really the topic today is talking about one of the biggest factors that goes into contributing to the flavor of the whiskey flavor of bourbon. And that is the barrel in itself. Yep,

10:55
distillers like take all the credit but it’s the it’s the wood it’s magic that happens we outside of that and, and, you know, we were just walking around the plant and you know, it’s it’s always humbling and awesome experience to see just you kind of forget how much labor is involved in like, from barrel to bottle and like you just get an appreciation and like so now every time I want to say a bottle sucks, I’m not going to say it because I just saw a bunch of guys sweating working their asses off and like it’s really cool to see that, you know, what really is one of those things that there’s just so many hands involved in it.

11:29
Yeah, and we’re going to talk more about some of the process and what we just saw. We just took a tour of the facility to kind of get some context of, of the situation. And yeah, I mean it was it’s a doing wrong, there’s a lot of machinery involved, but there’s it’s not as heavy as automation is like a bottling line now, there’s still it’s a very hard labor as process there’s a lot of quality control and quality checking that goes into it. And And not only that, as we’ll talk about the fire and it’s very unique compared to a lot of people with inside of the industry here. Of how How they toasts and how they chart barrels and how it is going to derive a distinct profile at the end of day for two.

12:06
Yeah, and I know why our guest wears black shoes. Walking around. Kenny had some Chuck Taylor white Chuck Taylors ons like those are yet

12:17
so we just had our guest dr in there. So let’s go ahead and introduce them. So we have today we have on the show we have Paul McLaughlin. Paul is the CO owner of Kelvin cooperage So Paul, welcome to the show. Thank you.

12:27
Thank you for having me.

12:28
I love having you here. Absolutely. So before we kind of get in talking about the business and talking about barrels and stuff like that, let’s talk about you. Did you ever growing up I mean so by the way if if people didn’t catch catch on you have an accent right so slightly Yeah, so you’re not really like the sap like really deep South Alabama, from Shively? No.

12:51
No, so we I grew up in Scotland and my family there had a small cooperage mainly repairing barrels for scotch whiskey industry so it was a pretty small operation. So I’ve been around barrels all my life and swore I would never work for the family business. So was the name Calvin. It was Calvin Coolidge up yet. So my dad started Calvin cooperage when he was young service apprenticeship when he was 15, and then started the cooperage when he was about 2122. So, you know, had a good run with with that. And then in the early 90s, we realized that it made sense to repair the barrels in the US before we shouldn’t have discovered it was a very simple idea, but it was quite revolutionary at the time. So we was this because a lot of stuff just ended up being too damaged by the time while you’re shipping bad would, you know, freights expensive so why not maximize your freight costs by shipping on the barrels that are ready to fill without needing to be worked on. So that was kind of the genesis of our move to Kentucky. So we came here or my brother came here. Kevin is cooler with me, came here in the early 90s and started out during repairing us bourbon barrels and send them back over to our customers and Scotland. That was right around the time that American oak was being just kind of rediscovered for wine barrels. So we started making wine barrels and that was where we learned how to toast and treat wood the right way, you know, slow toasting and everything. And then of course, craft bourbon came along and we jumped in

14:35
with two feet into that

14:37
is a lot Why did you say you would never jump back into it? And then why did you jump?

14:42
Why would you do anything with with the Merrill’s you know, working with my family, you know, I know that that’s a tough dynamic A lot of times when it’s proven to be at times, so I wanted to avoid that. Unfortunately, the way I avoided it, but by becoming a lawyer A few years as a lawyer, I would have done anything including working with the family. So 20 or so years later here, I am still very cool. Yeah.

15:09
Okay, so let’s, let’s also talk about it. So your family was was already doing this for the scotch whiskey industry. Correct. I’m assuming that, you know, in growing up over in Scotland, and people probably say the same thing about us being in Kentucky. I mean, I guess whiskey was was probably pretty common in the household and Oh, yeah,

15:26
yeah. All was a blended scotch. That was just the standard, like bourbon is here. Yeah. You know, that was all people drank. Although growing up, it was more of an old man’s drink. You know, that’s certainly not where I started out.

15:41
Yeah, we’re just start out with it. Well,

15:43
you know, playing a lager. Yeah.

15:46
Yeah. And I still like a pint of lager.

15:49
Was there a turning point for you when you said like, I can, I could probably get on this whole whiskey train to when I moved here.

15:55
Yeah, I found bourbon much more approachable than then. scotch whiskey. You know, to start learning about whiskey much more drinkable. And what was what was the thought process in your head did that because, I mean, we’ve we’ve had scotch before and you’ve got such variations of single malts. Yeah, we’ve got Pete’s and non Petit and then but then like you got the corn side of it that brings this sweet flavor. So what was your kind of? It was just trying bourbon when I moved here, I’d never really drank it before. And everyone was drinking it. So I thought well give it a shot. Yeah, everybody join them. Yes, I might as well and I got local and it was good. You know that that was the light bulb was like, wow, this this stuff is good. It’s got some complexity. It’s a bit more interesting than just a beer or wine. You know, it’s a nice change of pace. What did you What were your first thoughts when you came to Kentucky and like, how did it compare to Scotland? Well, yeah, like, I moved here from Southern California. So that was a culture shock. You know, I was living on the beach in Southern California working as a lawyer. So coming into This environment here it was in San Diego. Yeah. No, it was a big change. Yeah. But you know, I’d been in visited so I knew I liked Louisville and I like the the kind of the countryside you know, the rolling hills around here remind a lot of people of Scotland and I felt the same. So you know, and there’s you know, friendly friendly people terrible climate but but you know it we it is getting raging whiskey though because that’s the only thing and for seasoning words so it works. It works out well. But no, we’ve loved it since we’ve been here. You know, my my kids have been born and raised here. So we’re, we’re all in what’s awesome.

17:41
So So kind of talk about the genesis of of the of this cooperage as well because your brother came here kind of started it and then when did you say like okay, what was that was the turning point when you said I’m ready to start

17:53
joining the family business. What year was that? thought came in 2001. Okay, so I’ve been practicing law For four and a half years at that point for a big, big international law firm doing kind of soul crushing business litigation, mainly petty discovery disputes. So, look, young partners, which was what we were all aspiring to as beginning lawyers. And they were all pretty miserable. So I thought, why am I Why? Why am I aiming for that? So my wife was, was working at the same law firm as me. And we both just said we need to get out. So family business here, we’re

18:33
ready or not? Yeah,

18:34
yeah. So

18:36
yeah, let’s say So you started here. Now, was it hard with your brother your boss at first, or did you kind of like how

18:42
did that so that’s all part of that. family dynamic? Yeah, I was a bit hesitant. older, younger, he’s seven years older. Okay,

18:51
gotcha. Yeah. Younger,

18:54
would be really and he also served as apprenticeship and Scotland. So he’s a he’s a fully qualified Cooper, which I’m not and which he reminds me of.

19:07
Yeah, there’s some fun dynamics going on.

19:09
Yeah. So talk about that different dynamics, what it like you said your brother’s the cooperage. What do you bring kind of to this business that maybe you’re trying to figure them? Yeah.

19:22
You know, we have a great time running it together. It’s a very relationship driven business. You know, you’ll have seen that with the people you’ve talked to, you know, we’re all kind of collegial. We’ve got very long term customers. So we have a great time. And it’s an interesting bunch, especially this new kind of craft whiskey. It’s brought in a bunch of very interesting, entrepreneurial, different people. All of them have a really great story and you know, they’re great fun to work with.

19:51
Were those relationships that before you came on board or were you having to go out and like, knock down doors be like,

19:57
yeah, I want your barrels are You know, you know, and that’s what we tell some of the younger people here. So it hasn’t always been this way. You know, whiskey wasn’t always booming. So yeah, we did have we had times where, you know, we couldn’t sell barrels and we had to find new homes for them. You know, we were knocking barrels down and shipping them to China for flooring. You know, they were selling them for less than $10 a barrel, a US battle, you know, which people can’t imagine now. You know, they’re in such high demand. So yeah, I mean, we definitely go through cycles. Yeah, yeah. This one’s just been a really good one for a really long time. Yeah, yeah. Nobody, nobody has podcasts on bridges when you’re in a downturn. I went the first probably 18 years here without doing any interviews at all. No one knew we were here knew no one cared. And we’ve had you know, podcast Video Productions radio shows, you know, you like

20:54
just leave me alone.

20:56
Let me do my work. We are known as a novelty for a while. numberless done. Yeah,

21:02
very cool. And so kind of talk a little bit about, you know, the process here and how it’s a little bit different from some of the other ones we’ve we’ve had brown Forman, we’ve had independence Dave on the show, and kind of talk about like, where the process what you do how it’s a little bit different hats you need to get anybody else. And not only that is you’re doing both ends of the spectrum. You also are getting barrels, you’re also brokering and doing a lot of sales, too.

21:26
Yeah. So on our new barrel production that the big difference between us and some of the ones you mentioned is scale. We’re tiny compared to independence Dave and brown Forman. So we’re not nearly as mechanized, so is a lot more physically labor intensive, intensive. A lot more hands touch the barrels. So we are you know, on a really good day, we might be able to do 500 barrels, new barrels, which sounds like a lot but you know, if you think of other cooperage is doing two and a half to 3000 Today dejenne idea of the scale that I mean, heaven Hill fills 1300 barrels a day. Exactly. Yeah. So we can’t keep up with something like that. So, so the barrels we’re making, we’re doing them a lot more physically intensive, our toasting and charring is all done over natural fires. Using that wine lesson, we learned about how to treat the world with with long, slow toast. Only once that has a toast layer in there. Do we lie the barrel Tatchell ignite and char. And we really believe strongly in that. That toasting process adds maybe 20 minutes to the time the barrels on the fire. So that is a huge constraint on our production, but we’re not willing to give that up. We could double our production tomorrow by cutting that out and the two minute gas fire barn but we’re not going to do that there’s no guy anywhere near these battles

22:56
yet kind of talked about your reasoning behind the toasting as well because I know that you know brown Foreman’s typically always known for toasting their burials to independent stage not as much. So how to talk about your, your idea of, of white toast.

23:09
So the idea for me and again comes from wine barrels is your toast layer is an additive layer. char is an extractive layer, it’s like a carbon filter. So it’s going to extract some of the undesirable young flavors that you get from the new mix spirit. Whereas the toast layer is going to be additive, it’s going to add those nice sweet American oak notes that we’ve all kind of grown to love that kind of, I always describe it as marzipan there’s kind of enough He ormandy my listeners are very familiar with Mars a friend, Fred mineva, lovey Mars band, but that’s what we’re going for. And it gives it that kind of gives it kind of that middle palate that you’re looking for fills out in the mouth. And you know it when you smell it, and we smell that toasted barrel back there, and I think you all going to immediately A lot of people describe it as campfire, toasted marshmallows, I definitely get more of the marzipan note, but that’s what we’re looking for. Once we have that, then we do the char jars important, they’re going to interplay, the char in addition to doing all the extractive work, obviously, it gives the color as well. So we want that interplay. And as the spirit expands in the hot months and goes into the wood, and then contracts in the winter, it’s going in and out of all those nooks and crannies we create with the alligator char, and it goes all the way into that toast layer, and then back again. So that that’s it’s the interplay, toasts and char is exactly what we’re looking for.

24:42
Yeah, that always been the process and your family’s, I guess making a barrels or is it

24:46
something when we were doing wine barrels, it was all about a slow toast, okay. And that’s what we learned and we we play around with that on ways to slow it down and you know, do different things. Extend the toaster, get deeper penetration We’re applying that to whiskey barrels.

25:03
The natural fire is an interesting aspect of this and I’ve never seen a natural fire. That’s cool. Yeah, exactly. I mean it’s it’s something that it is it’s something that I it almost that the equipment was something that is very reminiscent of a campfire. I mean, like these little metal kind of like tube things that you put in kind of harness everything in there and you kind of you kind of control it. When you bring a Boston button here.

25:26
Like, do you like the perfect

25:28
hovered over? Yeah, yeah. And so kind of talk about what the the differences in in going with a natural fire versus somebody. And that’s mostly what the big the big guys do is they have a an automated system, the barrel setup, you count down, it’s like three to one and then the run you see this massive like flame come up, and then it’s there for eight seconds, 15 seconds, whatever it is, and it’s done. So kind of talk about flavor characteristics or imparting of that, like During the HR process, because we sat there as the toasting was happened, and then you also said, watch this guy, he’s going to speed it up, right? So kind of talk about, like, what that is like when the charring happens.

26:11
Yeah, so the natural fire, we think are important for a few reasons. Not not the least of which is, its sustainability. We’re using our own offcuts, so we’re not wasting that would when we shape ahead, we generate the little offcuts of white oak, that’s what we burn. So we like that standpoint to it’s a bit more sustainable. But we do think it adds some really desirable flavors, like we discussed kinda like drilling a steak on a gas grill or a exotic or the charcoal. Yeah, everyone. Everyone has their own preference. In terms of what we do though. You’ll notice there was no timing and no temperature controls back there. There’s nothing Yeah, a lot of other people are trying to remove the human element from this kind of make it idiot proof or something. We want a human element. We want our guys to be looking and smelling especially, we want them to know when they’ve hit that sweet monster panda. And then they let it Ignite. So we’ve kind of made a conscious decision to not have any timing or temperature controls there. We want the human element because these guys have been doing it for years.

27:17
Yeah, as they say, it’s a very unique process and actually watching it happen because yeah, typically, this is all something that is on some sort of automated belt system, but no, I mean, it’s literally guys yelling the barrels over and hand putting them over top of the fire. Yeah, and they kind of like stepping back a few seconds letting it do it, but it’s a tough job in the

27:35
summer I jump in there. Yes.

27:38
Can huge fire scare chiller? I feel

27:41
like I’d be like keep my arm here today. Yeah,

27:44
yeah. Yeah. That’s a tough one. Yeah, yeah, it’s um it’s good in the winter tough in the summer. So how long like you said these guys know what they’re doing? Like how long do you think it takes a new guy to kind of get the feel for it or the one of the guys on the phone or yours today as well? relatively new, it’s maybe his second week on the fires. You can tell he’s jumping around with it and compared to the other guys, yeah, no longer so a couple of months, ya know, if you can last the summer it’ll be all right.

28:12
And so I guess that kind of goes into like an employee rotation is it is where is somebody coming in? It’s like, I don’t want to say it’s like a Ford factory line, but it actually is a factory, right? And do they have one responsibility? And like, that’s all they do for their time here, or is it kind of like, okay, like, we’re gonna rotate you around. So we everybody kind of has, yeah, we just and we

28:31
don’t rotate a ton, but everyone can do everything. So if there are backups, everyone can filter by and clear the backup. So we have a couple of floaters, but most everyone has an assigned position.

28:43
Yeah. And I guess because it’s so labor intensive and like you want to keep that human element.

28:49
I do Paul’s yard. And we, you know, labor is hard to come by these days and I cut my own loan for example, I can find anyone to do

28:58
it. So So how talk about The labor you know, because manual labor is not like the most appealing thing these days is, you know, most of our guys are 15 plus years with us. Okay, so we have very, very little turnover. And that’s key for what we do. You know, the some of them are 20 plus years. So that’s been really a great boon for having that stable workforce.

29:20
Yeah, absolutely. So So kind of when talking about back to the business a little bit in regards to scale, we’ve been talking about like the newly built barrels. I want to talk about a little bit of the sourcing aspect, kind of like, what is what is the magnitude of barrels that you have coming in per day that you’re buying on the market from distilleries that you have relationships with, right, and then sort of where does the journey go from there?

29:46
Yeah, so use barrels are coming in from everyone, all the major distilleries and a lot of craft distilleries to would do about 400,000 a year. So they’re coming in constantly. It’s a constant flow that we need. Most of those are going to Scotland and Ireland, the US barrels but a lot of them are going different places to anywhere. They’re making spirits. So are going to Asia a lot to Australia, especially down to Tasmania, which has got kind of a burgeoning craft whiskey market. I didn’t know that. Yeah, it’s your next trip. Maybe.

30:22
That’s my idea. What is their whiskey called? whiskey

30:27
scotch bourbon. Yeah, there’s a

30:31
fulfil, put it on the bourbon pursuit credit card. Yeah, funny down airline miles. Exactly.

30:35
So they’re going on 40 foot shipping containers 210 barrels to a container. They fit perfectly as if it was made to hold barrels. And they’re going all over the place ready to fill so they open container doors, roll the barrels off, fill them right away. That’s the idea. And you know people love they use bourbon barrel they know it’s only been used once they know it’s American oak. They It’s got that nice sweet bourbon flavor in it. So it’s it’s a key taste component of scotch whiskey Irish Whiskey not because they’ve been doing it for years. And so when somebody is or when you’re buying these barrels from somebody I think we had talked about earlier. Is there is there a sweet spot of what you want to be able to purchase? We just need them fresh. You know, the there’ll be a mix of different age barrels in different locations, but we just need fresh, not where you’re out barrel or 20 now, okay, now, not really the only people that really question that are beer guys. They’re looking for something special. Yeah, a lot of times we can’t tell what spin in the barrel if it comes from a big distillery. You know, we don’t know what run that was or what label it was.

31:47
And I would imagine that you’re not putting that much attention to sitting there trying to decipher stamps on the top of them either.

31:54
Yeah, no, we’re cranking the they’re not sitting for long. You know, they’re flying. Georgia.

32:01
And so you also not only just get bourbon barrels talk about the other kinds of barrels with the careers of master distiller spanning almost 50 years, as well as the Kentucky bourbon Hall of Famer and having over 100 million people taste his products. Steve nalli is a legend of bourbon who for years made Maker’s Mark with expertise and precision. His latest project is with Bardstown bourbon company, a state of the art distillery in the heart of the bourbon capital of the world. They’re known for the popular fusion series, however, they’re adding something new in 2020 with a release named the prisoner. It starts as a nine year old Tennessee bourbon that isn’t finished in the prisoner wine companies French oak barrels for 18 months. The good news is, you don’t have to wait till next year to try it. Steve and the team at Bardstown bourbon company have teamed up with rack house whiskey club rack house whiskey club is a whiskey the Month Club on a mission to uncover the best flavors and stories that craft distilleries across the US have to offer. Their December box features a full size bottle of bars. TV series and a 200 milliliter bottle of the prisoner. There’s also some cool merchant side. And as always with this membership shipping is free. Get your hands on some early release Bardstown bourbon by signing up at rack house whiskey club.com use code pursuit for $25 off your first box

33:21
and so you also not only just get bourbon barrels talk about the other kinds of barrels that you have coming in because you know we’ve we were good friends with with Bill and other folks from for gate whiskey which I know that you’ve had a hand in helping them launch their products and they got some unique barrels from you as well so kind of talk about that process of so you know, we’re we’re always tapped in to people who have different interesting barrels you know, Sherry or port that they’ve done some some finishing with. So we’ll bring those in when we find them and find new homes for them. So like before day, I think we find some x Sherry I think they were For that first release they did

34:01
it’s like x Sherry x rum like

34:05
and you know and we smell that barrel it tasted it sounds great. And then we have people like, you know copper and kings are always looking to do not strictly bourbon I know but you know they they will try anything with a barrel, any type of barrel they’ve got really interesting collaborations going on. And then people like barrel bourbon that do a lot of blending, always looking for interesting and unique barrels. And a lot of the beer guys like to do that too. So, really we’ve had all sorts of barrels come in from a whole different places

34:36
talk about some of the craziest ones you’ve seen.

34:38
We made we did we we called it a zebra battle for kobrin Kings where we took new staves and use staves and alternated them out the barrel, Justin, we’ve taken a red, Melissa, you know, you know what, like the outcome of that was or is it still still still awaiting DVD? Yeah, you have to be patient. As you know, and then we’ve taken a US red wine barrel and I use white wine barrel and alternated those days. We’ve done we did with hoppings Kings again and we did a phoenix barrel we called it where we took one of their old Sherry barrels, we took two old cherry barrels, we knocked one down and cut the wood up, use that as fuel for the fire, and then shaved the other one and recharge it over that. cherry wood. That’s where the Phoenix name came

35:31
from. He’s I’ve seen the Phoenix barrels from from from that I had no idea like what the connotation was, or

35:40
was it? Yeah, so you know, we say to customers, anything you can think of, we’ll try it, you know, because we’re always learning and interesting for us.

35:49
Has there ever been one that somebody came with an idea and you’re like, man, we’re not going to do that.

35:54
A lot of the ideas you can tell are marketing driven where they were looking for something different. So St. barrels the age of underwater don’t think they’ll be much oxygen exchange through those staves. One didn’t get too much fun. Yeah, so you know, you can usually tell when it’s marketing driven as opposed to, you know, distiller tasting driven

36:18
the pirate ship going across, you know, in a shipping container on a on a ocean liner or whatever boat they get, you know, like that would Jefferson’s ocean sounds like it’s salty. Did barrels pick up any song? Yeah, unfortunately

36:29
the they’re empty but yeah, I mean and the Jeffersons was a cool one too. Yeah, we did those barrels. And that was a, you know, make sense that, you know, the rocking and the heat is going to do something different.

36:43
Yeah. But these are also going and container ships. So hopefully they’re isolated and sealed to a degree where it’s not Yes, it’s not being right. You’re not getting too much sort of manipulation to it. As its as it’s making. Joking

37:00
went right

37:02
on point.

37:04
So you we’ve talked about scotch. We’ve talked about Irish whiskey. What about like, Asia and Japan? Like, are there? Is there a huge market that you’re selling there too?

37:14
Yeah, we send a lot barrels into Japan,

37:18
into Vietnam, Thailand, Myanmar, they’re making tons of whiskey all over Asia. And we’ve done a lot of oil. Yeah, exactly. Yeah. And if they all start drinking whiskey, it’d be really good.

37:32
Yeah. I mean, I guess the, it’s always it’s always funny to talk about, like, it’s in me, it kind of goes back to just global and economic trade to how it’s actually cheaper to buy barrels used here and then have them shipped all the way across the world than it is to actually have your own local local cooperage that are in like some of these countries. So kind of talk about like, the economics they’re like, because you you’ve had to in your brother had to help build grow this business to really what it is today and start you on cooperage and you know that the man hours you know the real all the ones bobbing for new charred oak barrels, no

38:13
place. Yeah, that’s a great rule. You know, a lot of these places don’t have oak, you know, so that’s a huge obstacle, right? You know, they just don’t have a supply voke American oak is great because it’s growing everywhere right now. You know, so there is a good supply. So that’s your first hurdle. And then obviously, the labor is a is a big deal and trained labor and equipment, you need specialized equipment. So we use the ship a lot of us barrels knocked down, we’ve knocked them down, lay them flat on pallets and they’d be reassembled in Scotland. I’ve heard about that happening to that space delay disappeared because there’s so few Cooper’s and Cooper just left in Scotland, so there’s no one left who can do that anymore. So that’s a big obstacle, as well. They just aren’t skilled. Cooper’s to the same degree. Sir. Once once

39:03
you don’t think people you’re knocking them down you’re like, Okay, one to the name numbering the stays like this out. It’s got an order but now it actually takes like,

39:11
Yeah, but either like an Ikea box. Yeah.

39:12
And there’s no direction and some places. The we did number the stage but it’s still hard right and never get them tight again with specialized equipment and knowledge.

39:24
Yeah, I mean, even going through there and watching the process of you know, first actually having somebody Oh, you mean you have everything that comes from using the planning to knowing exactly the grade and exactly the angle of all these different stages need to be. So that’s actually that’s probably step five of the process yet everything between there, but then yes, it actually comes to the person where he is pushing or looking at eight to 10 staves at one time and knowing exactly like it’s a it’s a game of Jenga or a puzzle and I’m playing you watch new battles being done which the slaves are straight on to you. Berlin you’re doing it when I heard it. It’s that much harder.

40:03
Yeah and then David probably likes as well or do you think

40:06
it’s harder harder to actually physically manage on the straight stage you can make stand up with curved one it’s it’s trickier.

40:15
Yeah. It’s It’s It’s like putting together like a pile of bricks. It felt

40:19
like when you return something out of a box, you’re like, how did this damn thing?

40:23
You know exactly. Then you’re like, no way. You’ll never get it. And exactly,

40:28
yeah, exactly. Yeah. Yeah, I mean, the economies in itself, but I always it did make sense to say let’s just break come on down. We’ll ship the ship, the hoops will ship staves and then reassemble over there. But now you say it. It’s like yeah, once once you do have basically because we saw the process of what it actually takes to bend the wood where you steam it and then once in steamed and it’s and it’s kind of like an imperfect form that it goes into a machine where it actually does it, it bends it and then somebody sits there and puts the first coupon. You put the Second, third hoops on and then from there, it starts going through more of the, the toasting and in quality control process after that, too. Yeah. So also kind of talk about the quality control because that’s it’s always a huge factor of making sure that your customers are happy, right? Knowing that you’re not going to be shipping out a barrel that’s going to be leaking. Yeah, because we’ve we’ve had barrels, you go to the workout the Rick house and you’re like, nope, shut this one’s empty. Yes.

41:25
A nightmare. Yes, we do an air, air and water pressure tests, we pump about 20 psi of air into the barrel and we have a few inches of water in the bottom. So if there are any leaks will see them bubbling out. If they’re small green leaks or not or something we might be able to do a quick repair with a wooden smile. Otherwise, if it’s something more major, like a poor estate or something, we’ll take that Steve out, open the battle back up and do a repair. You know, we’re pretty conscientious about that because we have to be you know, everyone’s making a good battle. Nice. So you can’t have a winner there.

42:01
Yeah, I scared the shit out, man. They’re like, those things and like the bug just pops off is like

42:09
what happened? Somebody give me

42:10
alert next time. Keep on your toes. But yeah, for sure. Yeah.

42:14
So talk about some of the your customers and, you know, we got a lot of local brands looking at Yeah. And why they chose you over somebody else or, you know,

42:25
we are I think there is a an attraction to having a local cooperation. We have a lot of local customers that like the fact that we’re nearby, you know, it’s efficient. And also, if there are any issues were right here enough, they need a barrel. Quickly. We can we can do it. We can help them out. A lot of them opened up during the barrel shortage and they couldn’t get barrels anywhere. So they chose us. Yeah. Right Place right time. Right, exactly. But, you know, I think that local aspect is kind of an old fashioned where you would have a local Cooper local cooperage that you work So we do very, very well with Louisville distilleries you know the you know, rabbit hole peerless angels and directors all those guys are very good customers coppering kittens I mentioned as well. So you know, those are all great and that for us getting feedback regularly is really good having access to the spirit as it ages, you know being able to taste it is great for us to make sure we’re doing things right.

43:28
What you mentioned age right there talk about because I’m not too sure how many other products that are out there that have high age statements of them were Calvin Coolidge barely kind of talk about some of those because you name some of them that you did, and some of those are kind of like less than four years old. So yeah, is there anything that is is beyond that at this point,

43:46
um, what peerless is bourbon will be for.

43:50
And then we do have other customers we have customers overseas that are doing longer, extended aging, and some finishing as well with are new barrels and are used barrels. So people are to all sorts of different things. We, when craft first started taking off, we were doing a lot of 25 gallon barrels, you know, kind of half size and people wanted quick aging. They wanted to get product on the shelves, start some cash flow running. So we were doing a lot of 25 people seem to have graduated up to 50 threes now, which is kind of everyone’s preferred size. There’s something magical discounts on it has to be like

44:32
maybe 30. That’s sort of Yeah,

44:35
we’re getting there. It was proposed and there was a big backlash. Yeah. So I think there’s still comment period on that. But so we were doing less and less 25 more and more 50 threes. There’s something magical about that. And I think people now are kind of seeing less young whiskey on the market. I think people are have the wherewithal to be patient and wait Three, four years.

45:01
From a from a process point of view. Is it more difficult to say okay, we’re going to do a 25 gallon barrel run versus saying we’re just gonna standardize on 53 and call it a day. So

45:11
it’s 25 so tough, you know, they’re smaller, they’re physically more demanding, you’re bending over a lot more. So 20 fives are actually more expensive than 50 stories just because we can make fewer in a day Yeah.

45:25
And that commits and now it makes sense why peerless is so damn good at three years old. Your barrel?

45:30
Yeah. You know, and then some of them did release early earlier than they thought they would. Because of the battle because I don’t think it’s that toasting. Plus john. Yeah, on natural fires, I think it does speed things up a bit for if you want that, that option. So it gives you a distill it a bit more flexibility.

45:51
So now I just kind of like the wheels are kind of turned to my right here. So I’m gonna I’m gonna go back to like your your your brother and your father. And starting this. I know that they had had apprenticeships in and doing Cooper jiying and stuff like that. Now it was a lot of their stuff in just repair.

46:11
Yeah. And then Scotland is typically repairing us barrels.

46:14
And then So at what point who was who was the mentor taught anybody to say, this is how we build barrels. This is how we’re going to do things

46:21
would be my brother kind of figured on his on his own. Yeah.

46:26
What kind of like YouTube videos

46:30
for YouTube, unfortunately. Yeah. Yeah. I’m not sure how he how he went about that. That, you know, I think part of his training would have led him to that, you know, they do a lot of training on different sizes of barrels and different techniques. I think he would have just figured it out. I’m sure there was a lot of trial and error in the beginning that happily out. I wasn’t here for

46:55
I’ll swoop in. Yeah, let me know when you got everything.

46:58
Yeah. Sit Back in and run a business at that point right now. Absolutely. And not only that is you know, I kind of want to talk about the growth of like, where do you Where do you kind of see this going because today you know, you talked about that you know, it is a smaller cooperage and some of them are out there. However, you know, we took a we took a tour there’s, there’s barrels just entering and leaving like constantly it’s it’s a it’s a constant flow. And I’m sure there’s gonna be a point where you think you’d be busting at the seams Do you feel that that

47:30
that point coming and and what could possibly be the Yeah, we’ve been feeling that for about eight years now. And we just keep rolling with it you know, it’s been an incredible boom whiskies been on not only bourbon, but scotch and Irish whiskey, which is a big driver of our US barrel market. You know, we were grew up in Scotland’s so you learn to be pessimistic, so we expected that and every day No, but it just keeps going. So knock on wood Yeah. It keeps going.

48:01
So I mean, is it so you’re just kind of keeping the regular turn going?

48:05
Yeah, you know, we’re always looking to grow. If you’re not growing, you’re losing ground. So, you know, we’re upgrading equipment all the time looking at new markets all the time. Making sure we’re securing enough oak all the time, you know, it’s a constant, constant battle. Yeah, talk about securing a little bit because I would imagine that you know, it’s not like the new construction of a house market where that’s probably a lot more demanding than what it is to get, you know, Oak for for barrels, but kind of talk about how sourcing would plays into a lot of it. You know, it’s tricky just because the production capacities increased so much over the last few years, these new mega Cooper does keep being built that, you know, China’s got a lot of barrels and need a lot of states. So, competition for the stave logs is fierce. We work with four or five stage Mills that we’ve worked with for years. And they’re pretty loyal to us. They’re typically second generation businesses like us. So there’s a lot of commonalities. We work well together. So we’ve we’ve enjoyed the first shortage, we were able to keep going and grow our production. So we’re hoping that we’re well positioned to keep doing that. But you know, competition for those logs. It’s It’s tough. prices are going up. So and then if you have a wet winter, and you can’t get into the forest, that complicates matters as well.

49:28
I didn’t know that was a thing. Yeah. We just went there too. Oh, yeah. Yeah,

49:32
yeah. And it has an effect on getting logs at the forest. So you know, you have a bit of seasonality and shortages, which you have to try and plan for. Do prices reflect that as well. When you when you’re trying to find an open market like as in as insane like, oh, sorry, we couldn’t get there. So our logs are our staves are now x versus y. Yeah, the state die. Pants price increases on to us, we have a hard time. montoro

50:02
typical now business and so when you when you talk about just prices in general so Ryan and I we want to go and we want to want to buy barrels for for whiskey brand and this could be anybody that wants to start a new brand and they want to come to you kind of what’s what’s where do you start off like how how do you figure out? Is it 10 barrels? Is it 100 barrels? Yeah Where do we catch you at breakers or baseline? It’s just no

50:26
glams Well, we we have customers that buy one or two barrels at a time and we’ve customer to buy 10s of thousands at a time so you know we run the gamut. No order to smaller to large.

50:38
It sound like a hater man.

50:43
But what’s what’s an average cost of a barrel. It’s just a run of the mill. We are on a new barrel. We are not the cheapest producer out there. Because vol volumes are smaller and our barrels different so we’re you’re over $200 a barrel with us. Yeah, and you know, you can do under 200 other places. And we know that we don’t try and compete on that lower price. And because we’re not making barrels for the big legacy distillers we’re making for craft guys.

51:17
And you feel like that’s a good niche to kind of carve out in regards to that because you can, you can kind of create something that’s a more of a unique spin on on the typical

51:26
Yeah, and it’s more interesting for us rather than just one trip down to Boston, so and all our products in one fell swoop, you know, that’s not very interesting.

51:37
It’s like a good thing, and it’s a bad way I’m sure. I’m sure it keeps it interesting. The other thing it’s kind of like, Man, it’s a lot of phone calls. Yeah,

51:43
exactly. Yeah. And a lot of freight and shipping logistics, but you know, that’s fine. Kim’s been busy. Now. It definitely keeps you busy. I’m sure sure we get a good CRM database. People everyone was not a customer.

52:01
Mine’s all an Excel spreadsheet. That’s how I work. That’s a Google Sheets. It’s our we’re the same way. I have to deal with 2000 peoples. Okay,

52:08
I gotta get a hybrid system to keep track of them all. I’m sure Calvin’s not far behind that, too. I mean, it’s, it’s true. It’s a, it’s a growing industry. And, I mean, even if we’re looking at a lot of the bottles and tables around here, you’ve got a lot of customers. And it’s not it’s not just the big brands, it’s it’s people that are trying to carve out a new place in the market. And so you do have a lot of people that are trying new things, and I know that you’re, you’re helping them do that. So kind of give us your take on the market in regards of secondary finishing, because I know that is, you know, you source a lot of these girls, and some people look at it as a as a way to kind of make that differentiation into the marketplace to

52:50
Yeah, I think it’s a great move for bourbon. Some, you know, they’ve been doing it in Scotland and Ireland for a long time, kind of that blood Tradition. And I think this finishing is a part of that and extension of that. And I think it’s a good thing for, you know, people over here to be experimenting with, you taste some of the stuff that’s coming out, you know, that forget we mentioned before that taste great barrel Bourbons, different expressions. They’re all something different. You know, I think it’s a great day, Jeff Taylor.

53:26
Yeah,

53:27
yeah. So you know, I think it’s great. And it gives us something interesting for us to be involved in something different. So we like that.

53:36
Yeah, absolutely. I mean, there’s, you’ve got, you’ve got two sides of the market here. You’ve got you’ve got the people that look at it and saying, Oh, it’s a non distilling producer. They want to they want to cover up they want to mask you know, whatever it is that they’re buying. I kind of looked at as the other side to say, as a non distilling producer. You can’t just come out with something that is just like everything else.

53:56
Yeah, you can’t. You can’t get away with untransparent you know, people expect to know what’s in the bottle. And so you have to tell them, You can’t i can’t hide it anymore. The way people were doing, you know, six, seven years ago. Yeah,

54:12
as loving, it’s a much more savvy market out there. You know, there’s even people now that they go to distilleries, and they go and look at where cast is, and, and they’ll see the Kelvin Cooper’s logo on there. Yeah, and they’re gonna know it, they’re gonna understand exactly where it comes from, like, so. So the name is getting out there a lot more. All these podcasts are

54:32
like, every week, you

54:35
know, and it’s definitely cool to see that and see the growth of what’s been happening, you know, not only just to the growth of, of your cooperage, but just to the bourbon industry as well. If we start looking at 10 years down the line, when you kind of see Calvin at that point.

54:53
That’s a tough one.

54:54
I’ve been here for what 18 is that

54:56
I don’t know where the market will be that that’s the tricky bit Yeah, you know, will we still be booming? Will Scotland and Ireland still be booming if people keep drinking will be fine? But it’s a tough one. Yeah, I mean, I don’t even know what the market will look like next year. But you know, we’re, we’re gonna know. But 10 years is a tough one. Yeah.

55:19
I don’t know.

55:21
So the nice thing is about, you know, you get to win. There’s the distillers they have to forecast like even farther down the line. So the nice part is you get the money, like right now. Somewhat some way because they’re like, here’s the build it today. So tomorrow, yeah,

55:37
yeah. And then wait for payment. Yeah.

55:40
I know that part. Yeah. That 30s they kill you sometime? Yeah, it’s

55:44
longer not exist in this industry.

55:48
I’m sure. But you know, I wanted to say thank you so much for coming on the show today. It was

55:53
my pleasure. Thank you.

55:54
I mean, it was really for us and giving us a tour of the operation the facility because I I don’t think that you’re open to the public for a lot of people just to come in and look at it.

56:03
Oh no, we’re not for obviously. Yeah.

56:05
Bring your black sheep.

56:07
Yeah. Yeah makes your flip flop. Yeah make sure you send the emails way beforehand. Yeah, you come with some steel toed boots. Yes nothing because it is. It is an actual factory. It is a it is a

56:17
working for profit. cooperage

56:20
Yes. Exactly. Yeah, there’s, there’s no Hey, everybody, grab your heart. Let’s go ahead. station number one over here. No, none of that. No, but like I said, it was fantastic able to do that. In again, give us the idea of not only the scale but the craftsmanship that goes on here. It’s it’s not a it’s not an automated line where you’re just pumping stuff out just to pump it out. But instead there’s there’s a lot of detail that’s paid attention by the people that are better actually taking care of it day by day. So thank you again for doing that. If people want to know more about Kelvin cooperage online social media Anything like that How did they find out more about battle bridge calm? There you go. Yeah,

57:04
easy enough and there’s some videos on there to get an idea of what we’re doing

57:08
and if you need if you need barrels he already told you the price so yeah, just take that

57:12
multiplied by whatever you need on the ground and do the math man. How many we need?

57:17
We’ve got them will load your car up.

57:19
Yes. I got my truck good.

57:21
I don’t come with a Honda Civic. That I can tell you. We put them in there before

57:26
yeah. Oh, yeah. How that workout type

57:30
ratchet strap. Yeah.

57:33
Yeah, very cool. Yeah, it’s, it’s like I said in the beginning, I mean, we’ve been other cooperages. It’s so automated. This is like truly like an art like you can see like the individual craftsmanship and each barrel and it’s like pretty cool. Like

57:46
to kind of see that all stepping back in time.

57:49
It is it is it’s like amazing and it like and now when I drink a glass walls all I will vividly remember all those, you know, all the work and everything that’s kind of gone. In into that glass so no it’s a very much appreciate giving us the time and thank you opportunity to see everything and glad business as well and hope it keeps going well for all of us. Yeah, otherwise we won’t show up again.

58:14
For sure. So make sure you check out Kevin Cooper’s calm and you can find out more about them if you want to follow us of course bourbon pursuit on all the socials. And as well as if you like the show, you can help support it be a part of our community patreon.com slash bourbon pursuit. Again, thank you so much for joining us and we’ll talk to everybody next week.

Transcribed by https://otter.ai

The post 240 – Toasting, Charring, and Selling Oak with Paul McLaughlin of Kelvin Cooperage appeared first on BOURBON PURSUIT.

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