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Interview, Part 1: Max L. Shapira, President, Heaven Hill Brands

July 27, 2015

Editor’s Note: Heaven Hill Brands is the U.S. market’s sixth-largest spirits player by case volume, in addition to being America’s number-one independent, family-owned distilled spirits company as well as the world’s second-largest holder of aging Bourbon stocks. SND executive editor David Fleming met recently with Heaven Hill president Max Shapira to get an update on progress and trends.

SND: Bourbon has experienced a tremendous run in recent years. Where is the market headed over the next decade or so?

Shapira: We see tremendous opportunity abroad, where Bourbon is still in its early phases of progress. Scotch will remain strong, but overseas sales of American whiskey could be many times what they are today in the U.S. market. Our industry is investing hundreds of millions of dollars in plant expansion, inventory, product development and marketing because we think the current robust growth can continue for a long time.

SND: Heaven Hill spent $25 million in 2013 to expand production. How has that initiative gone?

Shapira: We’ve expanded our facility twice over the last several years, and we’re preparing to do so for a third time. We’ll be boosting production by nearly a third, in a project that’s due to start very shortly. That includes not only physical expansion of the distillery itself but also new warehousing and other additions.

SND: Your lead Bourbon brand, Evan Williams, has shown robust expansion, winning two straight Impact Hot Brand awards. What’s driving growth?

Shapira: Evan Williams was seeing consistent growth long before the Bourbon renaissance. We’ve enhanced the packaging and broadened the range, adding a special small-batch under our Evan Williams 1783 banner as well as Evan Williams White Label, a bottled-in-bond regional product that’s been expanded nationally. Evan Williams Single Barrel has won Whiskey of the Year awards five times. And we have the flavors—including Honey, Fire, Cherry and Peach, as well as seasonal offerings like Evan Williams Apple Cider and Evan Williams Eggnog. So there’s been a broad expansion of the franchise.

SND: Looking at the rye shortage, what’s the situation with Rittenhouse?

Shapira: We ramped up production some years ago, but we still can’t keep pace with demand. Rittenhouse is very unusual in that it’s a Kentucky-produced straight rye whiskey. Demand continues to grow, and while we do have more whiskey each year, Rittenhouse will always be somewhat difficult to obtain. There’s also growing overseas demand for rye, but we want to ensure Rittenhouse is first developed in the U.S.

SND: What are the latest developments on the innovation front?

Shapira: For years we’ve had a brand called Pikesville Rye Whiskey that is sold in only one or two markets, primarily in Maryland. It’s a brand dating back to the 1800s. We’ve redeveloped the packaging for a super-premium line extension and are rolling it out this fall. It’s a six-year-old whiskey bottled at 110-proof and distilled at Bernheim. We think it will make quite a splash, because it has history, integrity, and authenticity. The suggested retail price is $50. We have only a certain amount of stock, so it will be a controlled launch.

SND: Heaven Hill has been at the forefront of the Bourbon tourism boom, with the Evan Williams Bourbon Experience, the Bourbon Heritage Center and other initiatives. How are things going in that area?

Shapira: Bourbon tourism is still in its infancy. Last year 650,000 people visited the Bourbon Trail, and we haven’t come close to its potential. The Evan Williams Bourbon Experience is a way to talk to people directly. Consumers today want to learn everything about these products, and Bourbon tourism fits perfectly with that trend.

 

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