While the art of distillation in modern times may best be described as intoxicating, its roots are much more mundane. Surely fermentation was first recognized by humanity for its physiological effects, but it was alcohol’s utilitarian value in preserving food that truly made it valuable.
Since prehistory, man has fermented fruit and grain for storage. Because alcohol curbs or eliminates the growth of bacteria, it significantly lengthens shelf life compared with foodstuffs stored in other forms. It is for this reason that throughout time, a direct consequence of agriculture is alcohol, as it allows excess production to be utilized, rather than wasted.
Prior to the industrial revolution, beverage alcohol was omnipresent. Subsistence farmers and field workers drank low content beer, wine and cider from daybreak until sundown, to combat both the tedium of labor and the lack of clean water. By the 1st Century, Greek and Chinese alchemists had begun distilling these low-wines into high content spirits, giving rise to the
"national" drinks of Europe.
Whiskey came to America in the late 18th century, likely at the hands of Scot and Irish immigrants who began to settle and farm the area of present-day Kentucky. The spirit they brought with them evolved to suit these new surroundings, making increasing use of their primary crop, corn, and became known as bourbon in the early 1900s. It was easier, and likely more profitable, to ship to market than grain, and barreling whiskey for the burgeoning seaboard communities soon became an integral part of Ohio, Kentucky, and Tennessee agriculture.
Today,
interest in American whiskey is keen, as demonstrated by a recent announcement from MGP that it is spending $16.4 million to double warehouse capacity at its Lawrenceburg, Indiana distillery. MGP, for those that don’t know, is an
industrial-scale producer of beverage-grade alcohol, and the base spirit behind innumerable craft labels and “small-batch” whiskeys, including Bulleit, Smooth Ambler, High West, Templeton and George Dickel. This investment is predicated on management's belief that “American whiskey is in the early stages of a long term growth trend … Increased capacity will help us better support the rapid growth of the whiskey category.”
How that makes one feel about the merits of their favorite craft label aside, the real problem with MGP’s rationale is that it flies in the face of current trends in economic dialectic and consumer thirst.
Steel, electrification, and the model of centralized mass production ushered in the second Industrial Revolution, the greatest increase in economic growth ever recorded. Fueled by petroleum, improved communications, and
the Green Revolution, the period gave rise to a proliferation of cheap goods and the extensive urbanization of the world’s population, a cohort which in the past decade has come to exceed its rural counterpart for the first time in human history.
Today, we are on the cusp of another
industrial epoch, one founded in the leverage generated by lateral power aggregated from abundant point sources. At its core, the recognition that a networked system of smaller nodes has a greater effective capacity than a centralized one of equal magnitude. Millions of connected utilities, constantly propagating, evaluating, and disseminating the whole of global output at the speed of light will power mankind into the future.
The loudest voice in this movement is that of
Jeremy Rifkin, an American economist and philosopher. Rifkin
has become a vocal proponent of renewable energy and intelligent infrastructure, and he has the ear of some pretty important people. He currently
advises the United Nations on the Future We Want, and numerous world leaders, including the European Union and Premier Li Keqiang of China, have
incorporated his economic precepts into their plans.
Revolution relies on disruption; in this case, distributed capacity. It is here where MGP’s thinking lags, and why the future of spirits belongs to craft.
The emergent economy is comprised of millions of people around the globe who produce and share information and energy across a network of peer-to-peer connections. Just as Napster disrupted the music industry when they introduced the world to file-sharing, today’s micro-distillers are disseminating production capacity across the landscape, disrupting a near century long paradigm of mass manufacture sustained by cheap transportation and regulatory strangleholds. Much like server farms, power plants, and factories will inevitably be replaced by nodes, solar collectors, and 3D printing, micro and craft producers will most assuredly supplant bulk spirits.
Were it not for market forces, however, MGP’s strategy might still be considered sound, and in the short term will likely prove profitable. With the majority of humanity living in an urban setting, regional point sourcing is not entirely feasible in all cases, and the company’s scale and expertise ensures a product of consistent quality that will remain relevant for some time. But the American drinking public grows increasingly intelligent, and the days of non-distilling producers, those who source bulk products and market them as their own, are numbered. As spirit imbibers become better educated, and micro-distillers pay off capital costs and achieve profitability, they will ultimately begin to undermine the legitimacy of the MGP business model.
Mankind is entering the next phase in its economic evolution, and as the population of the world continues to increase, its propensity for existential qualities such as terroir, regionality and distinction in its provisions and appurtenances will only intensify. People in the next chapter of human development will not be satisfied with cookie cutter products from an assembly line when they can just as easily download a design to their 3D printer that expresses their own unique tastes, any more than they will tolerate a whiskey that differs from a dozen others only in its label. And while this spells trouble for the likes of MGP, it opens up a world of opportunity for true micro and craft producers, whose spirits embody the essence of how, where, and by whom they were made.
