Bourbon Boom Driving Missouri Barrel Sales

Don McGinnis traces his finger along the top edge of a wooden barrel on the factory floor, while a sea of workers around him cut planks of oak, position staves to form a circle, and char the insides of the liquid-tight containers.

As he and family members have done for decades, McGinnis’s inspection of the 600 wooden barrels that are produced daily at the facility is a critical part of the quality-control process that’s made McGinnis Wood Products a highly sought-after supplier of wooden barrels for alcohol producers worldwide.

“The barrels we’re putting on the trailers today will be full of whiskey tomorrow,” said McGinnis, the company’s president.

The seemingly unquenchable thirst for bourbon and other spirits in the U.S. and worldwide is leading to a boom in business for the company McGinnis’s father, Leroy, founded in 1968 as a stave mill.

McGinnis Wood Products began making bourbon barrels in 1987, and has grown to be among the largest cooperages in the country, producing more than 150,000 barrels annually. Its annual revenue, about $26 million, is the highest in the company’s history, and it’s on track to reach $30 million next year.

The company employs about 150 people at its base in Cuba, Mo., about 80 miles southwest of St. Louis.

McGinnis Wood Products makes barrels for some of the country’s top-selling bourbons, including Evan Williams, a Kentucky bourbon that’s barrel-aged for as long as 10 years. McGinnis also ships barrels to Japan, Spain, Scotland and other locales worldwide.

Bourbon and Tennessee whiskey are undergoing a resurgence, with U.S. sales growing nearly 20 percent from 2008 to 2013, according to the Distilled Spirits Council of the United States. Last year, more than 18 million 9-liter cases of bourbon and Tennessee whiskey were sold domestically, totaling $2.4 billion in revenue for distillers, according to the group.

McGinnis Wood Products also makes barrels for wineries, including Rambauer Vineyards in California’s Napa Valley and Chateau Ste. Michelle in Woodinville, Wash.

As more distilleries and winemakers are turning to barrel-aging their beverages, McGinnis is increasing capacity to keep up with demand. It recently opened a facility in Pierce City, Mo., that employs 25 people producing oak staves for barrel production. And it’s on the lookout for another facility in a neighboring state to keep up with rising sales. The company is on track to sell between 10,000 and 15,000 more barrels than it did in 2013.

“It hasn’t let up since the late 1980s,” said Leroy McGinnis, 85, who continues to oversee operations. “It’s just gotten stronger ever since.”

BARREL PRODUCTION

Situated along the famed Route 66, the company’s Cuba headquarters and production facilities are sprawled across 56 acres. Dozens of stacks of Missouri oak logs line the property, ready to be de-barked and split into staves.

After they’re cut, wood that will be made into wine barrels is air-dried outdoors in neatly stacked piles for three years. Wood that will be made into bourbon barrels is dried in a kiln.

Inside the main barrel factory, beginning each day at 6 a.m., workers place together between 30 and 32 oak staves to create a single barrel. The barrels are transported on a line through a steam tunnel that heats the barrels as high as 200 degrees Fahrenheit, to make them more pliable for steel rings to be added. At one station, an air-pressure machine is used to test the barrel for leaks.

A bourbon barrel’s interior surface is charred with flames.

“The barrel char filters out impurities and creates wood sugar, which accounts for 60 percent of the flavor,” Don McGinnis said. Wine barrels are toasted inside for varying amounts of time, based on the type of wine.

More than a dozen McGinnis family members — including Leroy’s wife, Ovia Marie, who’s 80 — work in the family business. Ovia Marie McGinnis credits Missouri’s rolling hills for producing the quality of oak that makes their barrels so popular.

“With the hills here, the trees grow more slowly, and there are less pores in them,” she said, describing the watertight wood. “It’s a tighter grain.”

BRANCHING OUT

Until a year ago, all McGinnis-produced barrels held 53 gallons for bourbon and about 60 gallons for wine. But a growing number of distilleries kept requesting barrels they could use for smaller batches, and about a year ago, McGinnis began making 15-gallon barrels.

The company now makes up to 100 15-gallon barrels a week, at the same price as the larger barrels: about $150 for bourbon barrels and $200 for wine barrels.

Goose Island’s brewery in Chicago buys used bourbon barrels from Evan Williams’s parent company, Heaven Hill Distilleries, that were made by McGinnis Wood Products.

Goose Island, which is owned by A-B InBev, uses the wooden barrels to age Goose Island Bourbon County Stout, a seasonal product released the day after Thanksgiving that typically sells out within a day of release.

Demand for its barrel-aged beers has grown rapidly in recent years, prompting Goose Island to expand to a Chicago warehouse that is 130,000 square feet, or four times the size of its previous facility.

“There’s big demand for new barrels and second-use barrels,” said Goose Island brewmaster Brett Porter.

The booming interest in barrel-aging by alcohol producers also has led to a rise in sales at Lebanon, Mo.-based Independent Stave Co., the world’s largest wooden-barrel maker. Founded in 1912, Independent doesn’t disclose revenue or production figures. It has three manufacturing facilities in Missouri.

Brad Boswell, President of Independent, said the rise in popularity of “brown spirits,” including bourbon and Scotch, has prompted the company founded by his great-grandfather to add employees and make acquisitions. Independent recently expanded by acquiring the assets of Ohio Stave Company of Zanesville, Ohio.

Brown spirits lost favor with alcohol drinkers from the 1970s to 2000, Boswell said, but there’s been a resurgence, particularly in the past two to three years.

“People’s palates are becoming more sophisticated, and that lends itself to brown spirits,” Boswell said. “As brown spirits have risen in popularity, the cooperage industry has benefited.”

This article appeared in print in the September 11th, 2014 edition of Hamodia.