Heaven Hill’s Multi-Generation History in Kentucky

Denny Potter is Heaven Hill Distillery’s Master Distiller. He has two decades of experience, working on Cruzan, Jim Beam and Maker’s Mark prior to joining Heaven Hill in 2013. I recently spoke to him about the History of Heaven Hill, which is the largest independent, family-owned and operated spirits producer in the U.S. and holds the world’s second-largest stockpile of Kentucky Bourbon.

Heaven Hill came from an operation purchased by five brothers who were business owners as Prohibition ended, running consignment shops and supply stores at the time. The company was passed down to the second generation, Max and Harry Shapira. Max is still President and CEO, and Harry was VP until he passed away. The third generation is now in place, with Max’s son Andy heading up sales and strategy, daughter Kate handling marketing, and Kate’s husband Allan Latts as COO.

Beverage Wholesaler: How important is family to Heaven Hill, and how interwoven is that philosophy within the company?

Denny Potter: It’s basically one in the same. The company has been around for 81 years because we’re family-owned and operated, and the family is committed to growing this company and preserving these American whiskey styles. That’s set a tone for the culture, that as we grow we maintain that family atmosphere. It’s a beautiful thing when you don’t have to answer to the New York Stock Exchange. Ideas that make good common sense are acted on very quickly.

The family has a great gut feel for what occurs in our industry, and we’re quick to act on things, rather than analyzing them over and over like other companies. If it makes sense, we do it.

To have a company our size with an accessible President and CEO like Max Shapira is rare. You can walk right in the front door, go ten feet into his office and talk to him about the basketball game last night. It’s cool to have that relationship, which trickles down through operations because we want to do right by them, since they do right by us. We take care of each other, which is unique in my experience.

BW: Heaven Hill has an extensive portfolio. What do you consider the company’s core brands?

DP: Our portfolio contains pretty much everything. Looking at our whiskey brands, which are the heart and soul of how we got started, you have to look at iconic brands like Evan Williams and Elijah Craig. They’ve been around a while and have great legacy and history behind them. We also have newer brands like Larceny, as well as other brands we’ve preserved.

We have so many different styles of whiskey that there’s something for everyone. If you have an interest in whiskey, whether it’s because of flavor profile or price or collectability, we have something for you. I often say that if we don’t have a whiskey you like, there’s a good chance you don’t like whiskey – which is okay.

BW: Heaven Hill is synonymous with Bardstown, Kentucky. How important is that town and the facilities there to the company?

DP: The site I’m at today is from 1935, and the bulk of our employees are from this county. For a company that’s lasted this long, and we’re a good size now with more than 300 employees, it’s rare to find most of your workforce from a town of 10 to 15,000 residents. It’s a family and people are proud to work here. We have our heritage center here in Bardstown on the bourbon trail, and five of our six warehousing facilities are in this county. We have the capacity to hold 1.3 million barrels and we’re at about 1.2 million right now, so that’s a lot of money going back into the community.

BW: There was a fire at the Bardstown facility in 1996. How did that impact the company?

DP: Seven of our warehouses and the distilleries burned, about 90,000 barrels altogether, which was 2% of the world’s bourbon stock at the time. It was an incredible fire. What came out of that was very important – it was a commitment from the family that no one would lose their job. We had a devastating fire, but they told everyone to come back in the morning because they were going to keep producing. People still remember that, and they remember Max telling everyone they still had work.

BW: In the whiskey industry, so much depends on forecasting because of the aging process. How do you make decisions today that will depend on consumer trends years or decades from now?

DP: I tell everyone that our entire business model goes against everything you learn in school. We have upfront costs, we put away inventory with no return for years, and all that time we’re losing product to evaporation. You can’t predict what consumers will want years from now – you have a gut feeling that you trust, but ultimately all you can do is continue to produce a quality product. If you get the forecasting right, you probably screwed up. We’re making whiskey today that could be Elijah Craig 23 year old in 2040, so the demand plan is really just a shot in the dark. Anybody that says they’re an accurate forecaster is lying – they’re just lucky.

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