When the Sazerac Co bought a run-down whiskey factory on the banks of the Kentucky River in 1992, it renovated the compound and rechristened it Buffalo Trace Distillery, after the trails cut into the countryside by bison centuries ago. Yet the name hanger prompted a question as predictable as the ancient buffalo’s migration: Why wasn’t there a bourbon actually called Buffalo Trace? Customers walked away baffled. Sazerac clearly had misjudged its audience.
The answer arrived in the form of 78-year-old Elmer T Lee, who had retired a decade earlier as the factory’s master distiller. Sazerac asked Lee to search the warehouses for a bourbon recipe the former owners hadn’t taken to market. He carried out a mellow elixir with hints of toffee and brown sugar. Buffalo Trace Bourbon hit the shelves a short time later, which led to another question once it was in production. “So, Elmer, how much of it do we have?” asked Sazerac CEO Mark Brown, a bald-headed Brit with an unshakable English accent. Lee smiled widely at him. “Not very much.” Great whiskey—but not enough of it. The Great Bourbon Shortage has caused a run on many liquor stores; Buffalo Trace’s solution is to provide small batches of quality bourbons rather than a great quantity of a mass-produced whiskey. Buffalo Trace is more widely known today than its corporate parent, Sazerac, which is owned by the New Orleans-based Goldring family and, yes, named after the cocktail invented in 1838. While Sazerac operations stretch across the US and into Canada, Buffalo Trace has become its most important asset. From its stills come Sazerac’s finest spirits. Not just the namesake bourbon, but also other top-notch whiskeys such as WL Weller, George T Stagg, Blanton’s—and the granddaddy of ’em all, Pappy Van Winkle. That wheated wonder is considered the nation’s most coveted bourbon and one of the best whiskeys in the world. And unquestionably the most elusive.
Buffalo Trace’s success in the past decade is the result of calculated alchemy and strategic acquisitions. Fame has been achieved (it has been named Whiskey Magazine’s Distiller of the Year five times in 14 years), while simultaneously cultivating an air of mystery. As for production, Buffalo Trace has reached 110,000 barrels annually, or 3 million cases, an approximately nine-fold increase since 1992. It’s still insufficient to meet the skyrocketing demand for bourbon, and for bourbon from Buffalo Trace in particular.
The men who sweated over stills on that patch of bluegrass haven’t always been as prosperous. They could sooner expect a once-a-decade flood than regular profits. A banker by the name of EH Taylor was there in 1870. Known locally as Colonel Taylor, he was never anything other than a civilian—and a prosperous one until his $72,000 investment in the distillery evaporated. Another owner, Albert Blanton, found himself pressed into making munitions and synthetic rubber at his distillery during World War I and was then nearly ruined by Prohibition.
By the end of World War II, Americans had lost their taste for bourbon. (They drink vodka and Canadian Club on Mad Men for a reason.) The distillery that eventually became Buffalo Trace struggled through the post-war decades by mostly making rotgut. (They did one thing right: In 1984, Elmer Lee introduced Blanton’s, the first-ever single-barrel bourbon.) Times were tough enough to lead to experiments in distilling expired soda pop. Sheep grazed as lawnkeepers. A barbed-wire fence encircled the property, much of which went unused.
“It looked like a prison camp, big and forlorn,” recalls Brown, who in 1997 came back to the Sazerac Co, where he had worked for 11 years. In the years following his return, the Buffalo Trace Distillery has been completely renovated. It now features 150 acres of well-kept lawns and gardens ringed by a green picket fence. Buildings are carefully preserved (the oldest is a currently unused stone cottage dating back to 1792).
The public can visit the distillery— though it’s not on Kentucky’s famed Bourbon Trail tour—but Buffalo Trace maintains a Wonka-esque quality in the way its executives relish reclusiveness. It is not uncommon for the company to answer media requests with an insistence that it prefers to remain mysterious. Especially when it comes to Pappy Van Winkle. The Van Winkle brand was part of Buffalo Trace’s M&A binge—20 or so businesses acquired since 1997—and came into the company portfolio in 2002 through a joint venture with the Van Winkle family. Buffalo Trace oversaw production while the clan concentrated on the marketing, mostly through tastings and brand dinners.
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(This story appears in the 19 September, 2014 issue of Forbes India. To visit our Archives, click here.)