Who's Next?

Quick sale of Blue Run Spirits makes us wonder who’s next?

On August 8, Molson-Coors announced the purchase of Blue Run Spirits—a sourced whiskey brand not even three years old. Over that stretch, the Georgetown, Ky.-based butterfly-branded company made headlines quickly with high-priced releases made magically delicious and marketable with the help of distilling legend Jim Rutledge. (The company refers to him as its contracted master distiller.)

Fueled in part by social media hype and spirits competition medals, Blue Run expanded its market reach to 31 states as of this year—no mean feat for a small company. Few migratory monarchs ever cover as much ground as do butterfly-branded bottles.

In the deal (financial terms weren’t disclosed), Blue Run marries into the Coors Spirits Co. family and gets two spirits half-siblings: Five Trail Blended American Whiskey and Barmen 1873 Bourbon—designer children made at Bardstown Bourbon Co.

All in all, this is a business story about smart entrepreneurs 1. recognizing an industry trend with an endless on-ramp, 2. an audience aching to spend a lot on the next new and shiny thing, and 3. moneyed types flush with enough mad skrilla to fuel the machine and drive it at breakneck speed.

Sure, whiskey is the fulcrum on which this story balances, but not every good business story is about a product. Many times, they’re not even good products. They’re just products in demand. This is a story about connecting the right pieces of a common puzzle and selling it to make more than it cost.

The story of venture capitalists dabbling in American whiskey is nothing new. Jim Beam was rescued from the ashes of Prohibition by moneyed outsiders from Chicago. The Shapira family used its hard-earned dough from its Louisville Store retail chain to start Heaven Hill. Those stories are everyday and nearly as old as bourbon itself. But doesn’t it seem the start-up-to-sale cycle is shorter than ever?

Bardstown Bourbon Co. operated for eight years before Pritzker Capital bought out its original investors. And to keep the gobble-up game going, BBC bought Green River Spirits Co. about the time the ink dried on its own bill of sale. FEW Spirits ran a lot of years (11) on its own before Heaven Hill scooped it up, and Rabbit Hole Distillery hopped about for seven years before settling in the cash-cushioned burrow of Pernod Ricard. Wilderness Trail Distillery hiked solo for a decade before Campari purchased it for $620 million! Now that’s amore!

So, do we agree that the butterfly brand’s flight from foundation to another’s habitat seems short? Maybe not for now-past owners Mike Montgomery, Tim Sparapani, Jesse McKnight and Andy Brown. Building a company from scratch in a competitive market is hard work. So, credit them for knowing how to create a business and sell it for a profit in short order.

Surely fans of Blue Run are wondering, “Will the whiskey change?” Maybe, but not definitely. (All four cofounders, by the way, will continue to work on the brand.) For consistency’s sake, it’s likely more of its whiskey will come from Bardstown Bourbon Co. than the open market.

Will price tags on Blue Run bottles decline to match those middle-market asks for Five Trail and Barmen? Doubtful. Molson-Coors bought a portfolio-expanding brand with super-premium positioning, so no sense in changing that status.

Lots of questions for the curious, for sure, but none has me as interested as this: Which upstart brand sells next?