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That's not exactly how that works. I buy stuff from the company you mention (MGP). It's grain neutral spirits (GNS) and it comes in at 193 proof. You still hav

That's not exactly how that works. I buy stuff from the company you mention (MGP). It's grain neutral spirits (GNS) and it comes in at 193 proof. You still have to have a distiller's license to buy it from them. Distillers can transfer products between themselves in bond. Bond is a process that exists mainly to make sure the excessive excise taxes levied on distilled spirits get paid. It's basically an audit trail for the TTB. You don't cut out a middle man, you actually add one, yourself. You just have two manufacturers, a distributor, and a retailer in the chain. The TTB requires you to pass it through your own still one time to call it your vodka. (I do canned cocktails so I'm not 100% clear on how exactly that works, the copacker I use is a distiller too and makes their own vodka from MGP stock and told me about this. I think the TTB added the requirement after the whole Tito's debacle.) I'm not sure which outsourcing company you're referring to. No liquor company makes 1,000 different brands. MGP makes a good array of products (and they have competitors) so there are a lot of whiskies, vodkas, gins, etc. on the market that come from their distilled spirits. They don't make any of the brands. (I mean, they do have a few of their own brands now, but not many.) Probably the vast majority of distilleries are buying at least some stuff from MGP, Signature Spirits, and the other bulk wholesalers. Even the guys who mostly make their own might supplement with that. If you make apple brandy with apples from your orchard, and the weather kills the apple crop, you're going to be supplementing. Also, food-grade ethanol is much more expensive to produce than the stuff that ends up in hand sanitizer or fuel typically. The non-edible ethanol uses yeast that ferment fast and hard but would taste like garbage in liquor, and the equipment is much cheaper than food-grade stuff, which always adds significant cost. I have to think even now liquor fetches much higher prices, so I doubt they're rushing to sell it to Gojo (other than as a marketing ploy). Also drinking is way up now, all my friends in all 3 tiers are telling me they can't keep up with demand. But with fuel demand being seriously curtailed and gas prices at a several year low, I bet fuel ethanol is going to hand sanitizer factories right now. I know some distilleries are making their own hand sanitizer, and it's probably a combination of marketing and capitalizing on a very brief trend, but I bet the bulk is coming from fuel ethanol. Speculation on my part there.

mattmaroon 7y ago
By the way, people in the industry call the bulk liquor "juice". If you ever want to have fun with a distiller when touring their barrel room, ask them "are you using MGP juice or distilling it yourself?" They'll give you a funny look and think you're in the industry.
Animats 7y ago
The company which makes a huge number of brands in California has a license as both a "rectifier" ("That means we can add water", says one of their execs) and as a "wholesaler".[1] They buy alcohol on which Federal excise tax has been paid, and distribute bottled consumer products to retailers from their own warehouses. "Easy freeway and railroad access along with nearby San Francisco/Oakland ports." 15 million cases a year. So they really do get to skip a level of distribution. [1] https://www.abc.ca.gov/licensing/license-types/ https://www.abc.ca.gov/licensing/license-types/
- mattmaroon 7y ago
  Interesting that’s a different company than I thought you were referring to and California law is a little different. But they’re not really skipping, they’re just the distributor. The manufacturer is who ever is paying the excise tax. So there is still a manufacturer, a distributor, and a retailer. This isn’t that uncommon or novel. There are brands that go through the entire 3 tiers that are owned by a retailer. They pay a manufacturer to make it and then a distributor to distribute it to themselves. Also the 3 tier system isn’t federal law, so there are states where, for instance, breweries and distilleries can sell direct to retail.

mattmaroon 7y ago

By the way, people in the industry call the bulk liquor "juice". If you ever want to have fun with a distiller when touring their barrel room, ask them "are you using MGP juice or distilling it yourself?" They'll give you a funny look and think you're in the industry.

Animats 7y ago

The company which makes a huge number of brands in California has a license as both a "rectifier" ("That means we can add water", says one of their execs) and as a "wholesaler".[1] They buy alcohol on which Federal excise tax has been paid, and distribute bottled consumer products to retailers from their own warehouses. "Easy freeway and railroad access along with nearby San Francisco/Oakland ports." 15 million cases a year. So they really do get to skip a level of distribution. [1] https://www.abc.ca.gov/licensing/license-types/ https://www.abc.ca.gov/licensing/license-types/

mattmaroon 7y ago
Interesting that’s a different company than I thought you were referring to and California law is a little different. But they’re not really skipping, they’re just the distributor. The manufacturer is who ever is paying the excise tax. So there is still a manufacturer, a distributor, and a retailer. This isn’t that uncommon or novel. There are brands that go through the entire 3 tiers that are owned by a retailer. They pay a manufacturer to make it and then a distributor to distribute it to themselves. Also the 3 tier system isn’t federal law, so there are states where, for instance, breweries and distilleries can sell direct to retail.