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Interview: McCauley Williams, CEO of Blue Note Bourbon

From a career as an attorney to crafting whiskey, we talk the ins and outs of Memphis blues, BBQ, the Delta, and of course bourbon and rye whiskey.

Listen to the Episode

Show Notes

Back in October, Lindsay reached out to me on behalf of B.R. Distilling Company. She mentioned that they had just won 5 gold medals at the 2020 MicroLiquor Spirit Awards and wondered if I wanted to chat with their CEO McCauley Williams about their Blue Note Juke Joint Bourbon and Riverset Rye.

Always looking for a tie into history and being a music fan, I found it the perfect opportunity to learn about this new entry into the whiskey market, blue notes, and juke joints.

  • Background of B.R. Distilling
  • The transition from attorney to distiller
  • 50 states of alcohol
  • The emergence the Tennessee industry
  • Secondary market and interstate commerce
  • Mothballed and the importance of inventory
  • How to use your business before you have your own product
  • How to keep your warehouse organized?
  • Palatized versus rick warehousing
  • Learning about whiskey through reading books
  • How to create a whiskey brand?
  • The B.R. Distilling ethos
  • The three tier distribution hurdle
  • The Mississippi influence
  • Riverboats and Blues
  • What is a Blue Note?
  • MacCauley's definition of craft
  • The value equation
  • Having a house proof

Listen to the full episode with the player above or find it on your favorite podcast app under "Whiskey Lore." The full transcript is available on the tab above.

You can find out more about Blue Note and Riverset at their Official Website. And thanks team for sending the generous samples of whiskey for me to taste.

Hear part two of the interview as a member of the Whiskey Lore Society.

Transcript

Welcome to Whiskey Lore I'm Drew Hannush

Back in October I had Lindsay reach out to me from BR Distilling Company and she had sent me a press release saying that they just won five gold medals at the 2020 Micro Liquor Spirits award for their Blue Note Bourbon and their Riverset Rye. I wasn't very familiar with the company and they wanted to know if I wanted to interview their CEO McCauley Williams, but here's the thing when I do episodes on Whiskey Lore and I do interviews I always like to keep them history focused I want to be talking about some aspect of whiskey history relating their whiskey to whiskey history or find an owner who's really passionate about a certain part of history. Well the name Blue Note did catch my attention because I'm a huge music fan and when I get into listening to some classic jazz some hard bop that kind of of jazz really going back into the the history and and digging out the old 78s well Blue Note is the label that brought us Thelonious Monk, Art Blakely, Wayne Shorter, Miles Davis did some work for them and they they they're still around there's Stanley Jordan is probably one of my favorite musicians who's come out of Blue Note in the last 30 years or so. Well the name of the whiskey did not come from the record label the record label and the whiskey both earned their name through a particular tone that's heard in blues jazz and some rock music. The Blue Note is well actually I'll let I'll let McCauley cover that during the interview how about that. Now there's another thing that is associated with music here when I looked at the label for the whiskey it was called Blue Note Juke Joint. Well juke joint is definitely related to blues and it's also related to whiskey more specifically probably moonshine but there's that connection there with whiskey and I love digging into music history just about as much as I love digging into whiskey history so I thought why not just pack up the car head over to Memphis to BR Distilling we'll do a story episode around juke joints blues and whiskey. Well as usual I end up going down the rabbit hole and as I start thinking about it I'm like ah you know I'm really close to the Mississippi Delta why don't I just take a little impromptu trip in that direction and learn about blues music search for the Crossroads and get into the history of the blues and juke joints in rural Mississippi? Well it turned out to be a fantastic trip it was short I didn't get a lot of time but I met some great people, some totally by surprise - and so I'm going to share some of that experience with you over the next week and a half. So here's what I have in store for you today I'm going to share with you my conversation with BR Distillings McCauley Williams and then later this week we're going to jump into the history of Memphis juke joints and Beale Street with Jimmy Rout who is the Shelby County Tennessee historian and then we'll next week go into my story episode about juke joints the search for the crossroads and a blues music mecca where you can still visit a real life juke joint in Clarksdale Mississippi and tell you all about that. And then sometime after that I'm going to do some sampling of the Blue Note and Riverset whiskies that McCauley and his team were so nice to share with me unfortunately I'm just recovering my senses from about with COVID and when they say that you can lose your ability to smell and taste well I kept my taste but my the smell was greatly deteriorated and I discovered it not too long ago when I was doing a whiskey tasting and I'm like I can't smell anything. So I am training my nose again I'm probably about 30 back but I want to give these whiskeys my full attention so those will be coming up in a few weeks. So right now let's go ahead and head to the warehouse at BR Distilling and this is in Memphis north side of Memphis. We're going to talk Blue Note in terms of whiskey and blues with McCauley Williams.

MCCAULEY: So welcome to BR Distilling company okay founded in 2013. formerly producers of Pyramid vodka there was a change in ownership in 2017 that I was involved in and we then pivoted away entirely from making vodka to focus on making whiskey okay nice

DREW: and so was it in this space?

MCCAULEY: in this same space okay so I was an attorney for the company I worked at the largest law firm here in the Southeast practicing mergers and acquisitions in business law and a buddy of mine had started the vodka distillery here came to me with some issues with regards to their business plan tried to help them ultimately the shareholders voted to liquidate the company and I had been working on the project for about a year and just became really interested in the whole craft spirits world and in my research realized that whiskey was really hot and I personally enjoyed whiskey Tennessee whiskey and bourbons more than vodkas. So came up with the idea what if we bought the company out of liquidation here's a fully licensed distillery sitting in liquidation effectively with the necessary assets and most importantly a license to operate a distillery. So I went to some of my mentors and private equity clients pitched them on the concept we raised the money bought the company out of liquidation and then and then I came on full time to run it and quit my job practicing law to get into the legal bootlegging business right nice recovering attorney.

DREW: So it's interesting because I've been running into a few attorneys here recently who have jumped into the the whiskey business how is that transition?

MCCAULEY: It's a it's a good transition you know it's a lot more fun than the billable hour working on a project now I just get to really focus on you know one project this company and building it. The legal background's been enormously helpful just there's obviously a lot of laws and regulations that go into distilling and the distribution of alcohol yeah most of them stem back to the repeal of Prohibition. Prohibition was so important for the industry for many reasons but one of them relative to the law is just the laws that were put in place when Prohibition was repealed - namely the three-tiered system and the fact that the federal government gave it to the states to govern alcohol. So what you have is 50 different little countries effectively how they view it so it's one of those areas of law where the substance of the law sometimes doesn't match the form. There's just it's it's a lot of form over substance I guess is how I describe the law so what lawyers would describe that is pretty pretty silly or antiquated like it just in this day and age a lot of these post Prohibition laws are hard to justify, because the you know the wrong or the fear which they were trying to cure in the 30s you know with the mob an organized crime and distribution alcohol doesn't exist today right so they're a little arcane. So the background there is great and then my being a business lawyer really helped just basic business formation and capital raising etc.

DREW: It's it's interesting seeing I actually did an episode around the 50 States of Whiskey and the idea that every state that I lived in when I was younger had some odd rule about whiskey that was tied all the way back to Prohibition and then Tennessee it wasn't really until 2010 before things really loosened up here to be able to allow more than just Jack Daniels and George Dickel to be and Pritchard came along in the 90s but that was that was about it

MCCAULEY: Exactly so with this company being formed in 2013 it was actually in that first wave of craft distillers because the law went into effect it was the movement happened in 2009 went into effect in 2010 obviously it takes most people a couple years to get a business plan together race capital et cetera but yeah prior to that law it was illegal to distill alcohol unless you were within one of three states three counties within the state those counties happened to be where Jack Daniels George Dickel and Pritchards were located. So they were effectively grandfathered in and once that law was repealed that allowed for the emergence of craft distilling and they're very similar laws all across the country as I guess you found where the manufacturer of alcohol was just flat out banned in some states or you know tailored in such a way that it grandfathered in some and prevented a huge barrier to entry for others. So when asked like why do we see so much of an emergence of craft distilling in an emerging brands that's a huge part of the reason because it just wasn't possible before that. And then obviously there's all sorts of consumership towards local products consumers desiring more complex flavor more unique flavors etc but really the answer is well it was just flat out illegal.

DREW: Yeah right so one of the things that's going on right now big time is this the secondary market a lot of people are shipping alcohol around I think what a lot of people don't realize is that you can't legally ship alcohol without a license around from from place to place so this is this complexity and understanding you know what the laws are in one state versus another yeah I mean you feel like you need a legal team to be able to just do a simple act like send a bottle of alcohol somewhere.

MCCAULEY: Well a lot of people don't realize they call it the secondary market it's really the black market because like you pointed out it is actually a secondary illegal trade and then when that bottle crosses state lines it's now an Interstate Commerce and it's a federal issue which all of that brings me to where I think we're gonna see that wall those laws loosening up in the future because it just doesn't make sense that you can't shift laws alcohol across state lines not only in the secondary market I can see the justification for how that could be illegal because it's not regulated but in the primary market like why why can we as a supplier not ship direct to consumer like wine. And it's really interesting how you know beer wine and spirits are governed differently in many different states and obviously spirits have a higher alcohol content so there is sort of a social justice endeavor to prevent potential harm and alcoholism and alcohol poisoning with liquor yeah I see that but then but again that seems sort of arcane if you can ship you know so if somebody really wants to get after a bottle of whatever they're going to do with wine beer or spirit doesn't really matter what it is but I think that's going to change.

It would be great because I know dealing with with sales taxes as a business owner it's it's all it's very much the same thing when you're dealing with 50 states and trying to figure out what one state's law is versus the other state's law it really kind of cripples the whole industry or in that case you know interstate commerce and trying to figure out how to run a business without having to again have a massive infrastructure of accountants and legal people behind you to do it. So you come in here and you are taking over a place that was creating vodka.

MCCAULEY: It was completely mothballed this entire facility was empty other than a few pieces of equipment

DREW: Okay so you're starting from scratch so where do you start in developing out a whiskey business

MCCAULEY: Yeah so the the single aside from just the licensure and legal perspective getting into the actual substance of the business the single biggest barrier to entry to this business is inventory inventory separates the haves and the have-nots in this business mostly because whiskey has to age so it takes years to accumulate an aged stock of bourbon or rye whiskey or whatever whiskey product it is. So the first step was putting in place production contracts with larger distillers that could supply us with go forward inventory that was step one which is its own difficult step because here I am a recovering attorney I was 28 years old at the time trying to go into these major distilleries and negotiate multi-million dollar inventory deals in an industry which I really knew nothing about reading everything I get my hands on was fortunate enough to make a few key connections really early on prior to even leaving the law firm to do this that that were able to introduce me to a few of the big players on the distillation side, so we work with producers in Tennessee and Kentucky we have laid down considerable inventory also with the distillery in Indiana none of those barrels are being used in our products today right now we just use Tennessee and Kentucky products but we do want to expand our portfolio that will eventually include Tennessee Kentucky and Indiana products. So step one is negotiating those step two was even even those barrels we were producing we were over a year out from launching our brand sales just due to designing the label, coming up with the brand name, assigning distributing partners right all of that so we needed immediate revenue so I recognized that there was a need in the industry for barrel storage meaning other people that are participating in the bulk market that buy from distillery A they want to bring it to their facility but they don't have space in their facility to bring on the barrels yet but the distillery from which they bought the barrels just said but yeah you got to get them out of our facility - so there's this temporary intermediate home or temporary intermediate storage facility need within the industry. It's actually a much bigger need or problem with an industry than I realized so I met a few folks that needed temporary storage so I was like well if I'm bringing in some barrels from from that group anyways why don't you send me all of yours and I'll charge you the industry standard which are handling fees plus dead storage fees. So step two was setting up our third-party storage business and by setting up a third-party storage business not only do we get immediate cash flow from that, which was integral to our first years of operations in terms of our cash burn but more importantly it's what led us to meet more and more folks within the industry. You know this is a very connection driven industry as I'm sure you've gathered and so someone you meet might have a better merchant for buying glass or a better label supplier or they might have excess inventory they're looking to sell or they might want to buy some of our excess inventory vice versa or they might have a great relationship with a distributor in some market that we want to go into or a great reference for a marketing firm. All of these connections you know it's it's you don't want to reinvent the wheel right and I realized really early on these connections are going to be key and I would attribute most of our success to date to our early recognition of needing to immerse ourselves within the industry and build out our network because it's proven invaluable over the last three years.

DREW: Yeah it's it's fun actually getting a chance to wander around and talk a little bit about what you're doing we're walking amongst many many many barrels how do you keep all these barrels straight

MCCAULEY: Yeah so forgive our organization we're a true you know production and operation facility so we're not open to the public but yeah we have a internal inventory management system it's called Whiskey Systems these tags you see on the barrels yeah Whiskey Systems is kind of the the industry standard software that's used to track the barrel so on the on the barrel it would state the the origin the actual distiller abortion they'll have their distilling license but most importantly is it generates a serial number in barcode under unique barrel identifier. Then we can fill into our system we build a three-dimensional storage or a storage account within the system that shows where every single barrel is and then we can always scan or trace based on the serial number. So surprisingly enough this is a brand new system for the industry like normally you just track based on lot ids that's all you're federally required to which is an alphanumeric system that states the year month in in number one through or A through L and then and then the date of the and then the date of the month so it's it's it's always kind of a little math puzzle when you're looking at an alphanumeric system that's backwards just to remind yourself of what month it came from. So yeah people obviously realize when you're managing thousands of barrels there's technologies come out that allows us to track it better yeah so we use Whiskey Systems they've been a great partner highly recommend them to anybody in the industry that's not using them and god that managed all of Sazerac or Buffalo Trace's inventory invented this system went out on his own yeah just to sell the software out there

DREW: And they definitely have a lot of barrels that they had to track in in that company so this is palletized rather than being a rick system so the rick being what you're traditionally used to seeing where you're rolling them in and these are just sitting on big large pallets which seems to be a trend that's starting to grow in in the industry why why did you choose to do the palletized versus building out of recovery

MCCAULEY: So although there are some purists or old school folks in the industry that claim that rick is somehow better for aging the whiskey there's no scientific evidence of that palletize is the modern method of aging whiskey it is more it's cheaper and more space efficient it's less labor right so a rick the rick system was invented by Colonel E.H Taylor in the late 1800s and the whole purpose of a rick system is so you can take one distillate one inventory put it on different floors and then create multiple different brands with different flavor profiles due to the different temperatures on the different floor and the effect that temperature will have on the whiskey we are looking for more homogenized aging we don't want our inventory of the same lots to taste drastically different within it so it's a single story building right so the actual temperature from our bottom pallet to the top pallet is does not vary but like about a degree or so but but really and truly too it's a space and and cost thing right so if you're constantly rolling barrels in and out of ricks just the sheer manpower that takes is exhausting there's all sorts of stories of broken fingers and toes with rolling the barrels we can harness the power of a forklift to move our barrels once we get them on the pallets. We store our barrels on four barrel pallets a lot of folks use six barrel pallets due to our sealing constraints in this facility we go four levels high so if you do the math four barrels per pound four levels high we're storing exactly one barrel per square foot. Because each one of these pallets is four feet by four feet yeah 16 square feet we have 16 barrels sitting on 16 square feet of space. If we had taller ceilings we would go up we would use six barrel pallets the math works out in order to in order to get below at or below one barrel per square foot using six barrel pallets you have to stack at least six levels high okay and because we can only go four high this makes no sense and then also the weight of each one of these you know around 500 pounds per barrel with around 2000 pounds per pallet that's there's a different caliber of forklift that you would need to do the six barrel pallets and they're cheaper so we we started off with planning on doing a four pa pal four barrel per pallet system a lot of groups do that. I have seen some groups that go as high as nine levels high on six barrel pallets. Yeah so the pallets we're looking at now we actually didn't design these are not a good representation like to show you some of our palates those are real that's a really poor design due to the cost of wood. So one of the other very first things we did was design our very own pallets these are our pallets okay a lot less wood used so they're cheaper but they're graded to hold 13 000 pounds. If we do the math four barrels per pound four levels high the bottom pal in our facilities bearing around 8 000 pounds. So we have them graded to hold 13 000 pounds that prevents them from warping over time they're all made out of treated pine pine's a lot cheaper than some of the hardwoods and it's just as strong and it took several months to design these things with a local pallet making factory you can't just say hey I'll have the whiskey barrel pallet please because as you saw those ones that another group sent in to us I think are a really inefficient design they're cumbersome they're too heavy they're too expensive so getting our pallets down to below $25 a pallet was key and they're they are a capital expenditure because we can reuse them and depreciate them there's some accounting things there too. But there's a lot more thought that goes into a lot of this craft than people realize people are like oh you just whipped it it's like no like this is this whole process and oftentimes something as simple as a palette can set you back months we didn't think about that until we got into it

DREW: Yeah so so where do you gain all of this knowledge we talk about distillers learning how to distill off of YouTube and you know that but I mean in terms of running a whole brand new business yeah you know based around whiskey and all the different things aspects that you have to learn to be able to do that properly right from the get-go

MCCAULEY: You learn it the hard way right you learn it through trial and error but also it's amazing how much information is out there on the internet and books that you can read yeah so before I got started I went on Amazon bought probably about 25 different books on whiskey and just read through all of them and then the ones I liked I would download them on Audible as well and then listen to them on tape driving to and from work so just really became a student of the industry and it's amazing how much information even in some of the books you've read is in there that an actual operator can pull out and use that strategy and then you know oh that's interesting let's do more research on that. But as an attorney I heard I heard this described well the skill of an attorney is the a good attorney at least is the ability to consume a huge volume of information and synthesize it down into a comprehensive you know written argument. Normally the attorney is consuming huge volumes information sensitizing it into a either a deal or a case whatever they're doing and then they forget it and they move on to the next right just constant absorb synthesize spit out and then forget move on. For me I've just been absorbing synthesizing and not moving onto focusing on that so it is a skill set. So that that translated well but yeah there. It's a it's an interesting industry because it's so old school like it's an industry that technology has yet to really reform into the 21st century so there's there's this weird juxtaposition of 21st century technology i.e like our computer software systems with like 1600s technology in barrels and so I guess things are done so logically and methodically because they're just tried and true techniques from over the years that you really can become a fast student of the industry and absorb it really fast through these books and countless online articles and YouTube videos all that.

DREW: So the other big hurdle that you have to get over is the idea of if you're going to have all of these if you're going to start selling a whiskey you have to create something that people are going to enjoy and you also have your own likes and dislikes how do you how do you start getting into that world of being able to craft a whiskey for the general public that's going to meet their needs and tastes.

MCCAULEY: So through that third-party storage business and through our working with other distilleries we we've processed around 45 000 barrels through this warehouse in three years of every different type of bourbon and American whiskey you can think of so we've had the opportunity to try pretty much everything that's out there. So when it came to crafting our brand we were able to study what other people were using from their inventories you know obviously with their permission to taste their barrels or whatever and we learned what we liked and what we didn't like. But really and truly the first step of creating a brand isn't even it if you haven't figured out the distribution there's no reason to even start crafting a brand. You first have to figure out how in the hell are you gonna sell it through this three-tiered system and then figure out what you're gonna actually sell but I guess it's a chicken or the egg thing. We'd identified the flavor profile that we liked which is we like the overall what I call classic bourbon and rye flavors and our our kind of whole I don't know ethos brand ethos is about delivering the highest quality possible product for the most reasonable price not necessarily the cheapest price but the most reasonable price and never chill filtering because we identified really early like the fatty oils and that was an area that I think a lot of bigger groups compromise on because they're trying to stretch volume. So we've never chill filtered nor do we have any intention to I mean maybe one day we'll have some obscure whatever brand that's chill filtered but any of our core SKUs that exist today will never chill filter them but the distribution thing's the biggest hurdle when we go back to like the law and the biggest thing that the repeal of Prohibition created it created the three-tiered system namely the statutorily mandated distributor. So if we were making cheese or selling meat or making soda whatever other food product we would likely from a business perspective engage a distributor because we would self-distribute until we realized that we could no longer keep up with the demand of producing and distributing and that their you know distributors serve their purpose but in other food businesses because you're not legally required to use a distributor there's a whole lot more room for negotiating in terms of the rate the the fees that a distributor will charge in our industry because there is effectively an oligopoly a monopoly of a set group of people that control distribution they are able to negotiate you know I'm not saying there's a conspiracy or that they conspire to keep prices high or anything like that but over the time there's been some industry standards set about what they charge and they charge typically between 25 and 30 percent which is a very large fee for being the logistics arm yeah and other food businesses you charge like 10 percent. So first you have to go find you know if they're going to charge you this much and they're going to be this important to your overall sales strategy you really have to find if we want to go yeah we really have to find the right distributing partner that buys into your vision of your product your sales strategy your marketing strategy etc so early on we met with countless distributors all our markets and that continues to be one of the biggest keys or really that will define our success is finding the right distributing partner for each market that believes in our brand and we'll push up the product because they're effectively the gatekeeper. You could have the greatest brand in the entire world if you don't have a good distributing partner it's not going to go anywhere yeah so that's kind of where the business side and then from from the you know the product side again we found the profiles that we liked and then you have like the packaging and branding which is kind of more of the fun part of it. It's also the hardest to define because you really don't know what people will find successful. We're here in Memphis you know within a half mile to the banks the Mississippi River we think that that provides really unique aging climate for our barrels with the high humidity and the heat that's down here in the Delta as we call it. So part of our company ethos or mantra is you know we are inherently a Memphis startup company and so most of us are either from Memphis or have made Memphis our permanent home. I'm a lifelong Memphian and we take a whole lot of pride in our city so when creating our brands you know we want to create jobs for Memphians through our production facility we want to put Memphis on the map for producing really good whiskey products. So we wanted our brands to embody Memphis themes so our two brands are Blue Note bourbon and Riverset Rye. Blue Note Bourbon is named after the blues that was born right here in Memphis which we'll talk about. And then Riverset Rye features a riverboat and that whole the whole story there is talking about how the riverboats and the river systems was the first distribution system pre-pre-developed roads and interstates and railroads because they put the barrels on the ships to ship them you know down the Ohio or the Missouri but either way they'd come down the Mississippi passing by Memphis on their way to New Orleans and so we thought that was a cool story to tell there. But our flagship brand is Blue Note we created that brand because we're I was thinking about you know what is the most quintessential Memphis thing or like what has the city of Memphis produced that's most influenced our American society and it became really clear we were debating here we have the river which is cooler set we talked about barbecuing food but it quickly became clear that our biggest contribution to American society is the music namely through blues music which later gave birth to rock and roll there's elements of the blues found in almost every form of modern music whether it be modern country R&B, soul what have you obviously rock and roll. And then when when you really boil down to what those musicians picked up on from the blues it was the blue note so the Blue Notes were pioneered you know here in the Mississippi Delta that gave birth to blues and also jazz music you know it's the troubled note the the note was created out of people who had not been classically trained to play certain instruments listening to certain notes and coming up with their own way to play the instruments. It's I guess technically probably an improper way of playing the instrument. To me the Blue Notes most most easily recognized for a non yeah I'm not a musician I love I love to consume yeah what they create love to listen music but I can't carry a tune to save my life but when studying it it's the easiest looking on a guitar and effectively you can you can play a Blue Note but you still have your finger on the previous chord that you plucked while you're already moving on to the next one so it creates that twang or that that that soulful feeling that you kind of feel in your bones. So when boiled down that's what defines blues and also jazz music but mostly you know we like to say it's mostly what makes bluesy nuke genre the music that's what the British Invasion and later folks like even Elvis picked up on when creating and pioneering rock and roll so it seemed like that was a cool substantive name to hang our hat on for our brand and then there's the pretty cool double entendre of tasting notes and this whole idea of a troubled melded note that is a Blue Note being a combination of two notes there's a combination of flavors that create a good whiskey.

DREW: I was gonna say were you gonna put a little funky note in in the flavor profile to make it go oh that's not normally something I would taste in there but

MCCAULEY: So we do have we do have some plans for some further line extensions that will get a little funkier and fun yeah the idea is trying we're trying to build our portfolio around the more tried and true classic classic methodologies and then we can layer on or surround them with more fun nuanced niche releases to make the portfolio within the bluenet family a little more comprehensive and complete. But what I recognized too is that there was a huge demand obviously for quality craft spirits when I say craft I like to refer to it in terms of the quality of the process and the authenticity and the unwillingness to compromise with scale. So some people hear the word craft and think that it means hyper local small mom and pop when I use word I don't mean that at all so we want to build national craft brands we want Blue Note and Riverset anything we do to one day achieve national distribution scale but we wanted them to always be craft in the sense that we're never going to compromise our process because ultimately that's what people buy. But I realize there's this demand for craft whiskey products quality whiskey products and the the craft folks the smaller folks the emerging startup companies were not able to compete with the big guys on price and so many of the products are frankly overpriced and so it seemed like there was some gaps forming on the shelves of where within certain price ranges say like our Blue Note Juke Joint is at the $27 to $31 dollar price range our target MSRP is 29.99 very very very few emerging brands they're able to hit that price point because they're selling that same quality of product for 40 $45 and I didn't see that as a viable long-term business model. You can only kind of hoodwink the consumer so many times before they realize they're going to do the analysis in their head which I call the value equation right which is quality relative to price equals value you know consumers aren't dumb right they're going to figure that out and so we want to maximize that ratio of quality to price i.e driving home the highest possible value to the consumer. So we realize there's some gaps for me on the shelves and we've created products to fill in those gaps and to place it like our Blue Note Premium Small Batch is a nine year 93 proof you know age dated product non-chill filtered that we retail for $49.99 there's all sorts of other products on the shelf in that same price range that are minimum age of two right you know

DREW: So so how did you come about 93 because I noticed that it looks like your whole line is at 93. what was the sure idea behind hitting that as a proof point

MCCAULEY: yeah so it has sort of in its own way become our house proof that we're sort of becoming known for so we didn't want to chill filter our products like I said if you proof down whiskey below 90 proof you get what's called flocking so we knew we wanted to be above 90 for scientific you know product quality control reasons but then also we found that above 90 was a sweet spot of where whiskey geeks or collectors or connoisseurs won't drink anything below 90. right but then also the general populace those that are newer to whiskey or maybe what I call the whiskey drinker not necessarily the collector more of like you know the Woodford Jack type drinker they're not going to drink something over 100. So we were playing around with various proof points between 90 and 100. we ultimately settled but we're really like 93 and 94 proof you know very very subtle differences in the overall taste there. And then we were looking at it and then it dawned on me that the blues were kind of born in the late 19 teens but really became popular in the 30s and that's also when Prohibition was repealed so the nine and the three is the century in the decade that blues were really emerging on the national scene and also the night it's an homage to 1930s I guess was it the thought but it was sort of happenstance that's how we like we like that and then since then every time we create a new product we always try it a 93 proof to see if we can maintain it see if it works there because sometimes it might fall flat but we found that with our three main SKUs Blue Note premium small batch Blue Note Juke Joint and our Riverset small batch that they really work at 93 proof so it's kind of a fun happenstance that we kind of it just happened.

DREW: So coming up in the second half of our conversation we're going to head into the bottling hall and talk a little bit about if there are plans for getting a distillery up and running within the confines of the warehouse also talk about Memphis barbecue and some great culinary eats in the area and we might even stir up a little bit of controversy if you go on a tour or talk to a distiller in Kentucky or Tennessee you're likely to hear about limestone water and when we started talking about the aquifer in Memphis and the quality of the water that comes from there and a very interesting answer from McCauley let's listen

MCCAULEY: it's relatively cheap water in that it's supplied to the city we have a really special water system here you'll need hear any Memphian talk about it it's been the subject of cases at the Supreme Court between the states as Arkansas and Mississippi have tried to effectively frack our water so it's been it's been the you know the focal point of countless litigation it's been at the center of countless business models from various industries but if you hear folks talk about their limestone water that has to do with the calcium in it and they say that that has that helps somehow during the fermentation process yeah I just don't buy that for a second because the best whiskey or the best any product is going to be made with the purest water.

DREW: and the gauntlet has been thrown if you want to hear more about that and more of the interview it is available to Whiskey Lore Society members at patreon.com/whiskeylore and never fear if you're not a member it's just five dollars to get in the door you can listen to part two of this conversation catch up on all the other bonus content that you've missed in the past thanks to McCauley and his team for their time ian was nice enough to show me around and give me a couple of samples out of barrels including some whiskey that came out of a barrel that used to store honey it's not quite as sweet as you would think it definitely did have plenty of those honey notes in it and some other really interesting fascinating whiskies they're working on over there with both the Blue Note and Riverset brands they're in about 14 markets right now and growing you can find out more by going to bluenockbourbon.com Whiskey Lore is a production of Travel Fuels Life LLC you can find show notes transcripts and more at whiskey-lore.com episodes I'm Drew Hannush and until next time cheers and slainte mhath

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