We had just met, but the party’s hostess had unfortunately introduced me as a "bourbon expert," so the Titan of Industry immediately brought up Pappy Van Winkle bourbon. "I buy a lot of high-end wine," he said. "So I told my wine guy to get me some Pappy Van Winkle bourbon, the 23-year-old. He got me three bottles, $2,000 each." To an extent he had a point—it was that he and his wine guy think nothing of spending thousands of dollars for an exceptional bottle of wine, and bourbon lasts longer because you sip it more slowly.
That’s called a value proposition.
Van Winkle has become something that rich guys line up with their other possessions in the never-ending 'whose is bigger?' competition with other rich guys. It used to be just a very good bourbon, something that was a little more expensive than the rest. Now it’s what bourbon enthusiasts call 'a unicorn.' You can rarely find it, and when you do, you can't afford it.
Pappy Van Winkle's grandson and great-grandson have presided over this transformation from better-than-average whiskey to cultural icon. His great-granddaughters have made a business selling Van Winkle-related accessories. None of the Van Winkles, back to and including Pappy, have been distillers. They have, however, been very good judges of whiskey and whiskey consumers, key factors in the phenomenal success of the brand today.
It all begins with 'Pappy.' He was born Julian Proctor Van Winkle in 1874, in Danville, Kentucky, the seat of Boyle County and part of Kentucky’s original 1774 European settlement. His father was a lawyer. His uncle was the Kentucky Secretary of State.
Van Winkle attended Centre College in Danville. In 1893, he went to work as a salesman for William Larue Weller, a rectifier who bought whiskey in bulk from multiple distilleries and then used blending and other techniques to create a line of whiskey products. Salesmen like Van Winkle were known as drummers, traveling around to bars, inns, and groceries with their samples, building relationships, and taking orders. (Ed. Note: The next time a rep buys you a shot of Fireball at a bar, just remember that he could be the next Pappy Van Winkle.)
Weller retired in 1896 and his sons took over. Within ten years, Van Winkle had risen the ranks to become a corporate officer at W.L. Weller & Sons' headquarters in Louisville. By 1915, he and another salesman had replaced the Wellers as principal owners. Van Winkle became president of the company.
After the Volstead Act stopped the bourbon industry in its tracks, Van Winkle merged W.L. Weller & Sons with its primary supplier, the A. Ph. Stitzel Distillery. To stay afloat, he sold medicinal whiskey and acquired the more popular Old Fitzgerald brand from Charles Herbst, a Milwaukee liquor merchant.
After Prohibition, the new Stitzel-Weller Company built a brand new distillery in the Louisville suburb of Shively. Old Fitzgerald became the flagship brand. Other labels included W. L. Weller, Rebel Yell, Cabin Still, and Old Rip Van Winkle. It was all the same whiskey off the still, a recipe the Stitzel brothers developed that used wheat instead of rye as the flavor grain. The more expensive expressions, Fitzgerald and Weller, contained more mature whiskey than the lower-priced Rebel Yell and Cabin Still.
The Old Rip Van Winkle brand was not widely distributed and was a small part of the company’s product mix. The name was taken from the famous Washington Irving short story and the label depicted a long-bearded Rip after his 20-year nap.
The Van Winkles owned the distillery from 1935 to 1972. Pappy retired in 1964, at age 90, and died the next year. His son and son-in-law took over, but the bourbon market was collapsing. Half of the family wanted to stick it out, but the other half forced a sale.
The Van Winkle family retained two assets after the sale of Stitzel-Weller Distillery: the Old Rip Van Winkle brand name, and the company’s customer list. From that, Pappy's son Julian Van Winkle Jr., formed a new company much like the original Weller firm. He bought whiskey from Stitzel-Weller and other distillers, packaged it in fancy, hand-painted collectible bottles under the Old Rip Van Winkle name, and sold it to the Stitzel-Weller customer list. For other customers, he created private label products. Stitzel-Weller’s new owners didn’t consider him competition. They even let him operate from the Stitzel-Weller campus.
His son, Julian III, joined him in the business and continued it after his father’s death in 1981. Stitzel-Weller's new owners eventually threw him out, so he bought the old Hoffman Distillery near Lawrenceburg, Kentucky, also known as Old Commonwealth. He bought it for the warehouses and bottling line, but never distilled there. It was a small business—besides himself, his only fulltime employee was the bookkeeper.
With a few exceptions, everything sold under the Old Rip Van Winkle name was wheated bourbon from Stitzel-Weller. That and extra age were the brand's hallmarks—the flagship product was a 10-year-old bourbon. (For comparison, Jim Beam white label is aged four years.) There was also a 15-year-old bourbon and a 13-year-old rye. For subsequent new expressions, Van Winkle dropped the 'Old Rip' name and imagery, emphasizing the family name. The first bottle of Pappy Van Winkle Family Reserve, with his image on the label, was the 20-year-old, followed by the 23-year-old.
The company continued to be small. Julian III reasoned that the best way to protect his premium price was to keep the product in short supply. He controlled his cost-of-selling by nurturing those relationships his father and grandfather had forged. If those dependable, long-term customers were happy, he was happy. He traveled constantly, appearing at distributorships, stores, bars, and restaurants, presenting his wares.
The last new distillate flowed out of Stitzel-Weller during the spring distilling season of 1992, the 200th anniversary of Kentucky statehood. The owners, a Diageo predecessor company called United Distillers, moved their wheated bourbon production to the rebuilt Bernheim Distillery in Louisville. Ed Foote, the last Master Distiller at Stitzel-Weller, became the first Master Distiller at New Bernheim.
In 1999, Diageo sold Bernheim to Heaven Hill along with the Old Fitzgerald brand. Sazerac acquired the W. L. Weller line at the same time. Both brand sales included stocks of whiskey.
Diageo still owns Stitzel-Weller, but none of the brands historically made there. There is no plan to resume distilling and problems with the neighbors have forced Diageo to empty the warehouses. It is now a tourist attraction featuring Diageo’s Bulleit Bourbon.
As the last Stitzel-Weller whiskey moved through the aging pipeline, Van Winkle looked for a new source. In 2003, he formed a joint venture with Sazerac Company. Old Rip Van Winkle 10-year-old and Van Winkle Special Reserve 'Lot B' 12-year-old became a mixture of whiskey made at Stitzel-Weller, Bernheim, and Buffalo Trace distillery (owned by Sazerac Co.) Old Rip Van Winkle 15-year-old got a makeover and became Pappy Van Winkle Family Reserve 15-year-old. Everything with the 'Pappy' name was Stitzel-Weller juice, at first.
As time went on, Stitzel-Weller whiskey disappeared from the younger expressions, up to and including Pappy Van Winkle Family Reserve 15-year-old. Today, while there may be a little Stitzel-Weller juice in that bottle of Pappy 20-year-old, there is not much. Only Pappy 23-year-old is still 100 percent Stitzel-Weller. All of that whiskey has been dumped and bottled but it hasn't all been released. Everything else Van Winkle is either a mixture of Bernheim and Buffalo Trace liquid (the older expressions) or 100 percent Buffalo Trace. It is still very fine whiskey—exceptional in fact—it’s just not Stitzel-Weller whiskey.
Julian III’s son, Preston, is now part of the company. Julian deliberately gave Preston a different middle name to spare him the roman numeral. At Buffalo Trace, as soon as new wheated bourbon distillate is barreled, Julian and Preston select the barrels they want and store them in warehouse locations they’ve chosen. It is Van Winkle bourbon from that point forward.
To paraphrase Billy Joel, Julian and Preston didn’t start the fire. Some say it was celebrity chef Anthony Bourdain who declared Pappy 'the world's best bourbon.' It makes regular appearances on the TV series, "Justified," and was Ryan Gosling's drink of choice while playing a cassanova in "Crazy Stupid Love." The Van Winkles are still constantly on the road, conducting tastings and Van Winkle dinners, though they sometimes wonder why they bother. They now release the allocation for a whole year once in the fall. It sells out instantly. The release size gets a little bigger each year but is nowhere near demand.
Whatever problems the Van Winkles may have in the routine course of conducting business, meeting their sales goals is not one of them. None of this looks likely to change anytime soon.