Buyout of Bardstown Bourbon Co. leaves some concerned, others hopeful

As of March 7, Bardstown Bourbon Company is the property of Pritzker Private Capital (PPC), a Chicago-based private equity owner of several manufacturing companies. (Read the news release.) Though BBC’s journey from conception (2013) to groundbreaking (2015) to its sale (2022) lasted less than eight years, the innovative collaborative distilling company enjoyed explosive growth and widespread praise for its architecturally arresting stillhouse and restaurant building. (The food and drink there are quite good, I must say.)

Though it has released multiple blends of its own young whiskeys with others’ aged stocks, it has yet to release a namesake bourbon—which seems a bit strange for the likes of a Kentucky distillery, especially one producing 7 million proof gallons annually.

Truth is, much of that whiskey is made for about 50 contract clients whose barrels are resting for rent in the campus’s dozen or so rickhouses. From day one, its leadership showed its business savvy and patience by using contract whiskey funds to pay the bills while growing the bottom line, even when it meant making less of its own. That plan has worked wonders at Wilderness Trail Distillery and Green River Distillery.

“We’re not in the bourbon charity, we’re in the bourbon business.” – BERNIE LUBBERS, HEAVEN HILL BRAND AMBASSADOR

The sale of BBC is a stone-cold business play. At least that’s how it’s interpreted in the motherland of American distilling. Here, we like our whiskey companies heaped in heritage, backstories believable or dubious, employee rosters that read like family trees, and products that were made in the Bluegrass State. Again, it’s a bit odd that BBC’s former ownership group didn’t wait to sell before its first bourbon was birthed of the barrel and swaddled in glass. It just seems like the thing you do before you sell, right?

But that’s a formality no one should hold that against them; this is a business. Every employee from CEO Mark Erwin to the grounds crew shows up daily to trade talent for money. Whether you get compensated with stock or you punch the clock, it’s how you get paid. As Heaven Hill brand ambassador Bernie Lubbers says so shrewdly and so often, “We’re not in the bourbon charity, we’re in the bourbon business.” That also applies to BBC.

Some social media groaning about the sale proves the peculiarity of how we romanticize businesses that make products we love. Despite an owner’s free-market right to sell a business, some customers take it personally when they actually do. Sure, there’s always a chance those products will change when made by new owners, but our free-market choice to buy elsewhere is always in play. Getting terribly emotional over such transactions is pointless.

Before I forget: If you’re thinking, “Pritzker, eh? That name sounds familiar,” you’re right. Donald Pritzker (deceased), founded the Hyatt Hotels chain, and his daughter Penny Pritzker, was secretary of commerce under President Barack Obama. Donald’s son, Anthony Pritzker runs Hyatt Hotels, and another son, J.B. Pritzker, is the governor of Illinois.

Back to the whiskey business: Best I can tell, this is PPC’s first whiskey play. Its website describes itself as “builders” of 14 companies listed there. A 2021 article published by the website Family Capital showed the company raised $2.7 billion last year from cash-flush investors eager to fund some PPC shopping trips.

The story also says that since 2016, PPC “has pulled off a total of 80 deals, including the acquisition of businesses by platform companies. There have also been a small number of exits.”

Well, either I'm misunderstanding something or PPC’s website doesn’t show all the companies it owns, because 80 deals and 14 companies listed doesn’t equate to a “small number of exits.” That’s a lot of turnover, which, actually, is what private equity groups do: buy a company, maximize its profits, make the balance sheet attractive to potential buyers, sell it off or take it public. On average that cycle runs from three to five years. So lots could have happened since 2016.

But I’ll give PPC the benefit of the doubt for now and just assume it hasn’t sold all the missing 64 companies. Perhaps those hidden businesses aren’t marquis assets. No harm, no foul.

And let’s be honest here: It’s not like every distillery in Kentucky hasn’t been bought and sold more than once. Two prominent marques with multiple past owners include Maker’s Mark and James B. Beam Distilling Co. Longtime bottler cum distiller, Lux Row, made whiskey for just a few years before MGP bought it for a deluxe price. And though Wild Turkey hasn’t had an American owner for 42 years, its website doesn’t list either foreign owner—Pernod Ricard and Campari Group—in its historical timeline. Oy, the details of whiskey marketing are slippery!

But here’s the good news about all of those: They still make good whiskey despite ownership changes. And drinkers can only hope that PPC will allow BBC to continue to run its business properly also. Since we’ve all seen such deals go the other way, general skepticism is understandable. But here’s to hoping that doesn’t happen at least until we get to taste that first BBC bourbon!