SYVERTSEN: Mr. Zimlich, I thought we would begin, if we could, by asking youwould you discuss how this operation started. As I understand it from our earlier discussion, Bluegrass Cooperage did not exist prior to the end of World War II. Is that correct?
ZIMLICH: That's correct. Bluegrass Cooperage started in 1945 as a result of theshortage of barrels for Brown Foreman Distillers Corporation. When the War was over and whiskey production started up very rapidly, there was a shortage of materials and barrels and also there was a shortage of manufacturers to make the barrels. Most cooperages who were owned by a major distiller were making barrels for their own parent company, which then gave Brown Foreman a second shot or a 1:00second opportu nity to get barrels from say Louisville Cooperage or some other cooperage. So, when it became apparent that Brown Foreman would not have enough barrels for their own to make their whiskey, W. F. Lucas set out to find a location to start manufacturing barrels for Brown Foreman. So, this current site we're on was part of Wood Mosaic and this actual plant made gun stocks for the rifles in the second World War. So, after the war was over and the facility was no longer needed for gun stocks, it became, it had already been a woodworking, a wood processing plant. It had kilns and it had elevators. It had a lot of the 2:00essen tials for a wood manufacturing plant, so that's when W. F. Lucas discussed with McClain about the possibility of buying a plant location and they bought it for, I think, $150,000, which was the 15 acres of building, what equipment there was, and what have you and then W. F. Lucas set out to acquire machinery and got some from up in Pennsylvania from an oil producing outfit that was going out of business and secured machinery from other areas, and at the same time, he hired T. O. Helm (Thomas Helm) from I don't know if it was Louisville Cooperage or 3:00Chess and Wyman, but it was cooperages owned by Shimley. . . . Bluegrass Cooperage. So, Thomas Helm was the first president of Bluegrass Cooperage and started the operation and we continued from that point to the present manufacturing barrels for Brown Foreman, and then once we had adequate cooperage and materials supplies for Brown Foreman's own requirements, then we set out to sell barrels to other distillers and, in essence, became competitive with all the other cooperage shops who had been in business for a long time, and through the years we have maintained close relationships with a lot of distillers like Heaven Hill. We sold to Jack Daniels in the years prior to the late 40's and 50's prior to Brown Foreman actually buying Jack Daniels, so the first contracts that Brown Foreman had with Jack Daniel Distillery was through Bluegrass Cooperage and the, you know, Bluegrass selling barrels to Jack Daniels, and in 4:00l956, Brown Foreman eventually bought Jack Daniels. I have to think that the type of relationship that Jack Daniels had with Bluegrass Cooperage, which was owned by Brown Foreman, led the bot tlers to believe that Jack Daniels would be in good hands, because of the fair treatment they had received through Bluegrass Cooperage.
SYVERTSEN: Gave you leverage over Shimley
ZIMLICH: Yes. Well, you know we're getting off the subject. One of the thingsthe bottlers were very much interested in about Jack Daniels was to have someone who would carry on and have the same production, not make any changes, someone who they had absolute confidence and trust in their methods and people, and so 5:00that was one of the major decisions that bottlers made when they sold Jack Daniels to Brown Foreman was that they had absolute trust in the lines of Brown.
SYVERTSEN: At the time that Bluegrass Cooperage was established, roughly howmany other cooperages were there in Kentucky?
ZIMLICH: Well, in Kentucky, I don't know what to count by, but we, oh, there wasChess Wyman, there's Louisville Cooperage, there's White Oak Cooperage, there's Ohio River Cooperage, there's, I think there's one or two others who I don't recall, because that was before my time.
SYVERTSEN: Was there a lot of shipping of Kentucky cooperages out of the stateat this point?
ZIMLICH: Well, there was a lot of major cooperages around. There was the Effler,6:00John Effler Cooperage in Baltimore and then there was Jim O'Tyler right outside of Baltimore and ... Walker had their cooperage operation in Peoria, Illinois. Flashmen had a cooperage shop in Owensboro, Kentucky. Glenmore, I think and I can't say this for sure, but I know they had a plant operation prior to their plant in Lebanon, Kentucky. So, all in all, I think there was a good 17 or better cooperage shops in the United States, which a majori ty of them were in Kentucky. Louisville was the headquar ters and all major cooperage manufacturers--Seagrams, Shim ley and Brown Foreman was all done here in Louisville. 7:00
SYVERTSEN: So this was the headquarters for the industry as a whole.
SYVERTSEN: Were there Tennessee cooperages?
ZIMLICH: No, the only distillery in Tennessee was Jack Daniels and at the timethat Brown Foreman acquired Jack Daniels, they were only filling 50 barrels a day. So on 50 barrels a day you really couldn't justify a cooperage shop. That's only about a truck load a week. So, as far as Tennessee, there's still only two distilleries in Tennessee and one of them is, well, is Jack Daniels, the other is George Bickel.
SYVERTSEN: Alright, can you tell me roughly how many workers did you have duringthe point from 1945 - 1950 as you were starting out? 8:00
ZIMLICH: I don't have those figures, but I know that we had a lot of areas inwhich there was a lot of manual handling of raw material, which has all been eliminated through pelletizing and current trucking methods. We used to, for instance, have to unload every piece of heading and very piece of stave by hand. It would come in on railroad cars and it would have to be taken out piece by piece and then stacked for air drying. They did kiln drying here on our yard. In 1962, we had our first loads come in which were actually stacked on pallets and brought in and we were able to handle the material without restacking. That in itself eliminated 125 jobs. I would say that basically back before we really automated a cooperage plant probably you got five to six barrels per man day of work. You were exclusive of the stacking of the raw material just in the barrel 9:00manufacturing production itself. You would use for your standard five to six barrels per eight hour man day. Today we're in the neighborhood of working 12 to 13 barrels per man day, so we have more than doubled productivity through equipment and machinery. We have also eliminated all the man handling, the hand stacking of material not only in the plant, but also in the mill yards where the raw materials are cut.
SYVERTSEN: But it's still a very labor intensive operation.
SYVERTSEN: Judging by my quick little tour of the plant there, I gather that thepossibilities of any further rapid mechanization are pretty slim.
ZIMLICH: The real set labor savings that could be effective in this industry now10:00would be in the stave joining, you know, the joining of the stave materials, and that's such a critical area insofar as costs of the barrel itself. In today's world, for instance, we're paying $35.50 per set of staves and go into a barrel and $8 per set of heading so we're looking at $43.50 just in the stave and the heavy materials prior to the joining of the material or any manufacturing per barrel which we sell and deliver for $57.00. So, you have a $43.50 cost of your raw material and the raw material costs are so essential that you have to really use expert hands and skills in order to get maximum yield out of your raw material. So, we have thought in terms of automation in those areas, but the 11:00risk of high cost through material loss just hasn't justified it. There are other aspects of when you're in an industry which has no growth and each year the requirements are less and less. It's hard to justify any capital expenditures into an operation whereby you really can't see a strong future or a strong internal investment. There's no growth, so it's really difficult and you're only going to do it if you know it has a real quick return and that just doesn't exist in this industry right now.
SYVERTSEN: Where does your oak come from? Is it mostly Kentucky oak or is itthroughout the Ohio and Mississippi Valley?
ZIMLICH: Really, all of our oak comes from about 17 different states. It comes12:00from Pennsyl vania, New York, Virginia, West Virgin ia on back over through Tennessee, Ken tucky, Illinois, Indiana and on up through Missouri, Iowa, Minnesota and Wisconsin. Those are the primary areas. I think I mentioned Ohio, but excuse me if I didn't, but really basi cally its in the midwest areas.
SYVERTSEN: Does it have to be a particular type of white oak?
ZIMLICH: They all have, we have a specific type of white oak but it has to bestraight grained. It has to be ? log. It can't be chestnut oak. It has to be what we term a tight grain oak. Its what we call, I forgot the exact Latin 13:00terminology for it, but its simply an oak which is tight grained and there are a lot of oaks which are actually opened grained which aren't satisfactory to the cooperages, and all our oak is quarter sawed so that the ? seals off and are sealed off and, consequently, the whiskey does not leak through the wood itself. With plain sawing material it would not be liquid tight, consequently, we have 14:00to quarter saw on all of our material. The material used to be, you know, everything was cut on a drum saw which was one of the really unique things in the cooperage industry. There used to be little portable mills that they used to take around and used to have a gasoline generator that they could just move around where the white oak was suitable for a cooperage shop. They just moved that right into the woods and they would cut the trees and cut it into logs and then they would start a saw mill right there and they would saw until, you know, they used up what was in that particular forest, and they would pull the rig out and move on to the next one and that was method back in the '30's or in the '40's and the '50's. These real small mills, they were a tremendous lot of pro ducers who were the producers, the people who actually ran these small mills, and they eventually then tried to set up in a more business fashion and 15:00find out one location where they were going to keep their mill operation and then they would truck the logs to that sawing location rather than taking the mill to the log location. Then as time went on, we developed other methods. We used to have chain saws that we used to cut the log into thirty-eight inch billets and then we used to use wedges and axes and split down through the logs to get a quarter saw which is, first of all you would split it in half and then you would take that half and split it into a half so that would be another quarter sec tion.
SYVERTSEN: You did that initially in '45? You actually had chain saws operatingas you first started up?
ZIMLICH: Well they probably had, well at that, no they had hand saws back then.It was right after that into the later '40's or '50's when chain saws came in, 16:00but they had the old two man saw that they actually used to cut the trees down with. Actually, they used to cut trees with a two man saw back and forth like you've seen pictures of. They had the axes and I would have to assume that they even used the axe to cut some trees down. You know, through mechanization we got into chain saws. See I always forget. When I first came to the industry we had chain saws and everything. I don't get back into the days when they had the old two man hand saw. You actually used hand saws then to cut the logs into the billet and hand wedges and hand axes to split the logs and then they had, we had what we call the drum saw. The old drum saw was just a cylinder which was 28 inches in, 26 inches in diameter. On the end of it, it had saw teeth so that as 17:00the log was pushed into the cylinder it would cut off the slabs in the circle and you would have the stave which would then be sawed to the circle on the diameter of the barrel itself.
SYVERTSEN: But you actually had logs coming in here at first, if I'munderstanding you, is that correct?
ZIMLICH: No, I'm talking, these are other locations. These are all saw mills. Wehad a few logs come here, but not many. We used to have mills here whereby we brought logs in and we cut them into stave materials; however, the only thing we brought into this location was the what we call a boat. A stave boat is the 18:00horizon section of the tree and we would bring the boats in and cut those into staves or heavy piec es. The actual splitting, the cutting the proper length and everything was done out in the forest area prior to being brought in.
SYVERTSEN: Now did you send agents out to preselect your woods? In practice, howcould this work when you first started up the operation after World War II?
I know with the corn, for instance, that distilleries use, often they will havepeople preselect the corn and then it will be checked at different points along the way before use. Is that true with the wood as well?
ZIMLICH: No, we, basically the oak is, you know, anywhere from 50 to 100 yearsas far as its growing cycle, and in the '40's when this plant started up, just about all the material was what we call virgin grown. It was still the original 19:00forest and had not been going through the second cutting yet. So there were many, many stave producers out in the industry. People had been cutting for many years, and what the company did was to go out and discuss the possibility of having people saw stave and head materials for Bluegrass. It was nothing but a bidding price war contract to see who would pay one another the most. At that time, there were an awful lot of crooks in the industry and they took tremendous advantage. You'd buy on a basis of say 4500 inches in a 1004-1/2 inch staves and by the time you got through trying to make bar rels out of it you may only have 3000 or 3500. The producer had really taken advantage of you. It was notorious 20:00that even in Missouri you had to be very, very careful when you bought anything out in Missouri, because they were a bunch of old pros out there and knew all the tricks. So, its always been, when we first started up, you basically say it takes 81 inches of stave material to make it go around the billage of the barrel and what you try to do is take as many or as fewer inches to go around that barrel as possible. Well, at that time, they could not come out and it would take sometimes 90 to 100 inches of material to make one barrel when they had bought it on the basis of 81 inches. They put 100 inches in a barrel which would take their cost up, because they put in an extra 19 inches of material into a 21:00barrel which, in essence, is what the stave producer had gotten by and had said he really had in there, but it was not satisfactory material. It was material which was infe rior.
SYVERTSEN: Which would mess up your whole maturation of whiskey because it wouldraise your cost factors.
ZIMLICH: And through the years we've developed our own inspectors and logbuyers. The logs that we buy, it still goes on today, there are people out who, there's a guy defecting a log. They'll try to make sure that that log has been covered up in mud, throw dirt on the bad spots so that you can't see it and a lot of times, once you get stung by one person who sold you something which really took advantage of you, you're always aware of that individual, but there 22:00is still that type of person around. So we still have to be very careful. We have right now our own inspectors who go out and they look. They pull a certain percentage of material in every stack. They go through it and they grade it and value it and have the authority to accept or reject it and pay for it based on their expert knowledge of what that material is worth. They're very careful about defects, about the quality of manufacturing, about the type grain that's in the oak. They know red oak from white oak from chestnut oak from post oak from various types of oaks. So they're really the people and the initial evaluation of the quality of the material is one of the most essential start ing 23:00points in the cooperage industry, because if you don't have the proper selection of the raw material and if you don't place the proper value on it, then you are going to be very unsuccessful in the cooperage industry.
SYVERTSEN: Roughly, what would be the price of your cooperage in say 1945-1950coming into the plant today? How do you measure, by board feet?
ZIMLICH: Well, the cooperage industry is very unique insofar as we start outbuying logs for cutting by the log foot and we pay so much per 1000 log feet and then, once that log is cut into stves, then we value the staves based on a 1000 24:00staves average width of four and one-half inches which gives you a total of 4500 inches of accumulative width of a stave which is 35 or 37 inches long.
So, we pay based on 4500 inches. Today we're paying $1,800 .00 per 1004-1/2which is 4500 inches. We've been as high as $2,250.00 in 1979. The lowest, in the '40's, it was in the $300-$350.00 range. Now I don't remember that figure exactly, because the lowest figures that I remember are $550.00, but I know that back when a barrel sold for $3.00 and $4.00 there couldn't have been a great price on a stave, of course, which, by the way, I've got a listing which you may have with the number of barrels made each year. I'll have to dig that out and send that to you. It starts back in 1933 and goes in each year the number of barrels made. It shows the overall number of barrels required and some of the original sheets, if I can find them, actually have the barrel price on them as far as what the barrel sold for in those years. The cost of material goes up and down. For instance, if it was $500.00 or $550.00 in the '50's; it could have been as high as $800.00 at various times. It is simply a supply and demand price structure. It's like the stock market or like a commodity market. If there is not a big demand, the price will drop off and a lot of the produc ers or manufactures will fall out, because there isn't an adequate profit. People don't want to cut a tree which took 50 to 100 years to grow when the price is low. So then they all back off from the market. Then all of a sudden there's a big demand for cooperage or for barrels and there's not much raw materials that has been manufactured. Therefore, everybody in the cooperage industry then went out and tried to buy staves and headings. We were going against the other 16 or so. If you ran a sawmill or a stavemill, you were going to cut for the persons who gave you the best price for the longest period of time. So, it was just a cut-throat deal where there was a lot of bidding going on as far as who needed what the most and who was going to pay the most. So, the cycles were up and down as far as the pricing of the stave and heading materials.
SYVERTSEN: Traditionally, how far in advance does a cooperage buy its materi al?
ZIMLICH: That went back through really the technology in the industry, back inthe '30's and '40's and '50's when the only type of kiln drying facilities that we had were by gravity air movement. Consequently, you had to have your, you had to air dry for at least twelve months to get the moisture content in the oak low enough, say around in the lower 20's, so that we put into these gravity kiln that you could dry it without pulling the moisture out too rapidly on the ends. By pulling the moisture out too rapidly on the ends, you would check it, which then whiskey would leak through the same areas that the moisture was pulled out too rapidly. You cracked it. You know, you pulled it out so rapidly that you rotted out on the end and cracked it.
SYVERTSEN: So, you have to have totally even drying in order to make a good barrel.
ZIMLICH: Yes. Then as we got into forced air kilns, we went from the gravitykilns to the forced air, we didn't have a whole lot of air room, maybe had 100 c.f.m. That would drop our stave and heading inventories down to maybe nine months. We held nine months air drying for many, many years as a minimum amount of air drying. Then we got into areas where having a more rapid air movement we found that we could actually dry the material much more evenly and wouldn't have to air dry material as long; so we then started dropping down to eight months. Then in recent years we're into what we call predr iers, which is a enclosure which simulates the drying envi ronment for stave and heading materials. It maintains an 80 degree temperature and 80 percent relative humidity and, therefore, we put in this type of a structure. We bring it down from the initial sawmill moisture content which is anywhere from 60 to 80 percent. We bring it down to 20 to 25 percent in predriers and from predriers into the kilns and take it on down to 10 to 12 percent moisture content, which now allows up to drop our inventories down to three to four months if necessary.
SYVERTSEN: And you have even drying.
ZIMLICH: And we have even drying. See, in the old days when they had 12 months,we had to have the good months. You don't get much drying say in this climate during the months of Octo ber, November, December, January, February. Finally into March you start getting the air movement and warmer tempera tures and as the winds would blow and the sun would warm the air, you would get drying on your air drying and then they start, in order to cut down on the investment in the raw materials, they then found that really there are certain months of the year so long as you get in those months you're going to have adequate air drying and therefore, you can really cut it down to nine months. That's how we got from 12 months to nine months. It was because finally they found out that the essential months of the year were in the Spring . . . (end of side one of tape one).
(Beginning of side two of tape one.)
ZIMLICH: . . . were in those prime nine months that you were alright and you hadthe moisture level low enough for adequate kiln drying and then we went to that into the predryer and other types of technology. We have gone from the 75 to 100 c.f.m. up to 600 c.f.m. in our kilns and some kilns today are up to 1200 c.f.m.; so, it's really an improvement in kiln drying technology which has allowed us to reduce how far in advance we have to cure our materials.
SYVERTSEN: In the industry as a whole, was there a lot of unevenness in gettingthe water out from say 1945-1950 or was it pretty constant?
ZIMLICH: Oh, I think that the distillers had enough commanding con trol wherebyand they found on various occasions that if the moisture was not removed properly, they ended up with a whiskey that was not up to standard. I know there was some whiskeys that were made right after the Second World War, which when there wasn't adequate cooperage stock around this then precipitated us getting into the business, because there wasn't enough aged material, and the whiskey that was made at that time was not up to standard, because it was put into the so called green wood barrels. You had a woody, moldy taste to the whiskey. Then in order to have exactive control over your cooperage and over the barrel, if the distiller owns that cooperage shop, they can maintain the exact quality that they want for their own whiskeys.
SYVERTSEN: It would seem that on the surface that it would be to the advantageof distillers to, going back to World War II, to own their own cooperages because that way they could keep the quality as constant as possible whereas, if they bought independently, they might not have as much leverage in keeping constant quality because those independents could be selling to competitive whiskey producers. Is that correct?
ZIMLICH: Oh, yes. In fact, in those days there were only two major cooperagecompanies and that's Bluegrass Cooperage and ? Company. ? is not owned by a distillery and over the recent years the quality of cooperage has gotten less and less due to the fact that some cooperage shops not owned by distillers simply are trying to manufacture a barrel for the lowest price possible to make the highest profit on what barrels they sell. Consequently, they are then trying to sneak by with any type of manufacturing process and any type of material into that barrel simply to maximize the profit. In our situation, we have exactive control over what we can do. We're owned by a distiller and our standards are still the old standards that was used in the industry years and years back. So, when you're trying to compete against someone who doesn't have that exact control over you, it makes it difficult at times. I don't know if you want to leave it at that on the tape, but the quality is one of the things that this company was built on is building a quality barrel, because of the quality whiskeys that went into it. We were always told don't ever say that the whiskey can't be sold, because the house in which it lived was an inferior house. You know, stating that the barrel was the house in which the whiskey lived and matured and it better by sound and it better by right. There better not be anything wrong with it, because our crest is in your barrel. This is the way all distillers went for years and years, but, as whiskey sells climbed and climbed and climbed, every distiller then tried to maintain exacting quality standards, because he had a product which was highly acceptable to the buying public, and as the demand for bourbon started to fall off, then the distillers started looking around as far as you know our brand is falling. Our brand is slipping. Maybe what we're making is not exactly what the consumer wants. So there are some brands on the market who had changed, who continually change, and with the price wars in the liquor field as they are today, it's very difficult to manufac ture and sell a bourbon which has to be made into a barrel or has to made and held into a barrel for four years or longer. You have your capital tied up
SYVERTSEN: And only used once
ZIMLICH: And used once in the bourbon field, yes. Then when bourbons were themajor selling distilled spirit in this country and they were competing against one another, when you walked into a liquor store and you saw shelf after shelf of nothing but bourbons then they were all competing against one anoth er and their manufacturing prices were all pretty uniform and then they could get a reasonable dollar for their prod uct. Then in 1949 when vodka came along which they could make today and sell tomorrow and could reduce the prices, you know in 1949 I think there was only 5000 cases of vodka sold and then through the years it kept on working its way up to where its pretty near selling. It bypassed bourbon, but, yet, the industry had to consider now we're not just selling bourbon whiskey against bourbon whiskey, we're selling bourbon whiskey against any other distilled spirit and we have to market our product. So, then as other prod ucts started to increase as far as desirability and they were moving along and bourbon was slumping, then distillers starting looking at now maybe we should change our product. Maybe we should make a change. Maybe we should forget the old theory that we make the best damn whiskey that anybody ever made and this is a taste which our master distillers and chemists say is the best and is consistent with what we've made for the last 50 years. Well, who gives a damn if it's not what the consumer wants. So, then some distillers started looking around. What does the consumer want? Then they started having marketing tests and taste tests to see what preference that the basic consumer wanted and that's when we started getting, well, one of the first ones I remember who really started to make a lot of changes was Old Crow. In the early '50's, Early Times came along and became a number one straight selling bourbon in the United States.
SYVERTSEN: . . . Old Crow up in 1953 I believe
ZIMLICH: They came out with these signs with the U.S. Number One and the U.S.Number One was the same type of road sign marking U.S. highways. In about 1953 when it was a lot of the major distillers didn't mind a small distiller you know in there competing and maybe being close to number one, but they sure didn't like a little distiller like ? coming out and brag ging about it and it got down to them, and then Old Crow came out with the slogan Old Crow On Top the Totem Pole and by god they went right up and they were number one and knocked Early Times right down, but then Old Crow started to have problems and then they changed product several times. They went from a straight whiskey to a blend whiskey to a light whiskey and now they're back, I guess, to a straight or I don't know what they're selling now, but, I think Old Crow was one of the first whiskeys that I remember changing around, and then Seagrams changed ? around, blend, straight and vice versa trying to find out really what the market was and so, how all this relates to the cooperage industry is, I think, that because of the change in thinking in a lot of distillers about what the American public wants, a lot of them have not been so demanding on their cooperage needs because maybe the old history that you want real deep color, heavy body and all this in the old bourbon, the modern drinking drinks are to lightness in color. So, the barrel as such in some plans has not been quite as critical as it had been. A lot of distillers, you know back when we had everything 100 proof whiskey and everything was bottled in bond, 100 proof and very little and we do have some 90 proof, then as the whiskey consumption interest changed, we've got down to 90 and 86 and now we've went from 86 to 80 proof was all the lightness trend. All this, I think, had deemphasized in the last five or ten years the real contribution that the white oak cooperage barrel has made to the bourbon industry. I think that the barrel industry has gone currently the same route that the bourbon industry has gone. The overall cost emphasis on the cost per barrel has gotten very keen in recent years. As the added cost that bourbon whiskey has which say vodka doesn't have which gin doesn't have, rum, scotch, Canadians, Irish they all go in a used barrel. So, therefore, rather than putting out the price for new barrel, they put their products into a used whiskey barrel at the much lower cost. Therefore, their initial cost to manufacture are a lot less and, consequently, they're still trying to sell competitively on the retail shelf against these brands. So, they have put a great deal of emphasis on cooperage shops to keep the cost as low as possible. So, realistically, today in terms of labor cost, in terms of material cost compared to what the '40's had as far as labor cost and material cost, the barrel is one of the best buys I would imagine of any industry. Quality wise, we at Bluegrass, as I said earlier, we haven't changed. We still do the best job that we possibly can to maintain the old standards because we are owned by a dis tiller and there's one brand which really demands the same old type cooperage and that's Jack Daniel. They want, Old Forester, wants the same old type cooperage. They don't want changes. They want consistence.
SYVERTSEN: Would there be a difference in an Early Times cooperage barrel versusan Old Forester level of bourbon? Do they come out of the same cooperage?
ZIMLICH: The type barrel we've made for Early Times and Old Forester or JackDaniels were all the same. Same type barrel. We manufacture the one quality barrel. Now we've gotten into two qualities barrels for the first time. We had to do that just this past year because of what I had said earlier. The competition, because of the fact that they were not owned by a distiller, were making barrels which were not up to the what I call the select number one classification and we couldn't go out and sell the old original quality barrel to some of the distillers because they don't want it because they were buying the cheaper the cheaper barrel. So, we now have two, for the first time in our history, we have two levels of barrels, two price levels of barrels and I won't tell you who buys what but some of the very distinct dis tillers still buy the best.
SYVERTSEN: Interesting. Now you also produce barrels for Jack Daniels right?
SYVERTSEN: O.K., then down there they would add the red maple charcoal that theyuse in the maturing process.
ZIMLICH: Yes, they cut their maple and they burn it and then they you know packit into their leaching bins and they run the whiskey off their still down through the leaching vats and then once it comes off the leaching vats then it goes into the barrel. So, the type of barrel they put their whiskey in is the same is the same as what Early Times or Old For ester or Maker's or anybody else uses. We do sell barrels to Maker's Mark and we sell to Heaven Hill and Jim Beam and Meadley, Bartons to Walker to Seagrams to National to Old Fitzgerald. We sell to just about everybody.
SYVERTSEN: That's interesting. I didn't realize you sold to Seagrams.
ZIMLICH: They are the largest, but they, when you stop and think, they are thelargest distiller, but they aren't strong in bourbons and they need some bourbons for their blends, but basically they don't have bourbons.
SYVERTSEN: How far back does the sale of Bluegrass cooperage to Seagrams go?
ZIMLICH: Oh not very far because you see they just closed their barrel plantdown in Memphis, Tennessee. By the way, there was a barrel plant in, National Distillers had a barrel plant in Memphis, Tennessee and then they sold half the interest to Seagram and National and Seagrams went together in manufacturing barrels for their own needs and they shipped them back up here. I had forgotten about the plant, but it's no longer in business. They, last May, sold that plant to Independent Stave who simply closed it down. Independent Stave bought the Louisville cooperage plant here and closed it down. They bought the bourbon cooperage plant in Lebanon, Kentucky and they were operating it. What has been going on is, because of the lack of a need for cooperages, all the cooperage shops have been closing down. In order to keep other people from buying the machinery and going into competition, certain companies have been going out and buying all the cooperage machinery and just stock piling it so that competition can't come in. Now, anybody in their right mind is not going to get into the cooperage business in the first place and anybody in their right mind ain't going to tie all their dollars up in equipment they're not going to need. So, I think two wrongs don't make a right.
SYVERTSEN: As you know, there's a lot of movement in the distilling industrytoday to come up with some unique, different products or mixtures of a distilled spirits and to move more towards looking at how you can effect consumer tastes. Is part of this research that's going on today also at the barrel end? I mean to change the taste. In other words, is there interest in looking at how the barrel has been put together and how taste factors coming out of the barrel itself could be involved in this change that's going on in the industry today? I don't want to ask you any secrets, but you know, I was over at Brown Foreman recently and was in on the taste thing and I noticed some very interesting, novel ideas going on in coming up with new products. So, my question really is, you know, is part of this new product interest today also related to chang ing what goes on in the barrel for taste?
ZIMLICH: There has always been interest in how a barrel could be reused. We havealways recognized the fact that all scotch whiskey goes into a used bourbon barrel. Irish whiskey goes into a used bourbon barrel. Canadian whiskey goes into a used bourbon barrel as does rum and brandy and there has always been some interest in why can't that barrel be reused for bourbon. I mean why is it always thought that the barrel can't reconditioned. So, we've been and have done test work for various distillers as far as going back in and knocking the char out, laying the interior of a barrel, taking it down to another layer of clean wood and recharring the barrel and then the distiller would then refill and then run tests on just what the end result is and they've also refilled used barrels and put those in warehouses just to see what the end result is. We've run staves that whereby we have grooved the inside of the stave. We put, you know rather than planing it smooth on the inside, we have planed it and have these small pyramids all inside to give it a lot more so called wood surface because the peaks and valleys of the plainer going through. It's like a stairrated interior and it was thought that that would give you more char area. So, those type of tests are going on in the industry. I guess the basic test back in the early years was how much toast does a barrel need, how much red layer under the char layer is required, how deep and how heavy should a char layer be? These are types of tests which you know were developed by all distillers back in the early years as far as quality standards on the toasting layer which is the, they call it the caramel layer or the red layer which is the layer underneath the char and then how heavy should the char be and what effects that's going to be. There have been all kinds of tests that's gone on in warehousing as far as so called natural warehousing where a barrel is put into a warehouse and the doors are closed and it sits in it for four years and then it's drawed out as compared to a barrel going into the warehouse and temperatures in some areas were not allowed to drop below 50 degrees in the wintertime. So, they wanted to make sure there was some working going on in maturing the whiskey and, too, some distillers had determined that the whiskey didn't mature when a whiskey dropped below 50. Other distillers have heated warehouses whereby they maintain and they heat the whiskey up and then they open the windows in warehouses and then they cool it back down. They would heat the whiskey up to 85 degrees and then cool it back down to 60 and they run these cycles and they have what they termed artificial, you know they were simulating the Summer and Spring cycles. So, we had those types of cycles. Other distillers thought well maybe heat isn't all that necessary. Maybe it's the overall circulation of the air in the warehouse because in any ? warehouse the best whiskey is on the top floor. The bottom is the greener whiskey. Some distillers in other earlier years used to take and rotate the barrels from the bottom floors to the top floors.
SYVERTSEN: Labor intensive
ZIMLICH: Yes, and then in order to get around all that then they got a littlesmarter and they started pulling the like numbers off the top floor as the like numbers off the bottom floors and dumped them together. Then they got from that point into where they thought well if they move the air around that they could simulate top and bottom, but that really wasn't as effective as if they kept the bottom floors heated with steamed heat or some type heat and then circulate it. They would keep a constant temperature in the warehouse. I mean there's been all these type things trying to get the maxi mum out of the barrel, getting the flavor characteristics that the distiller wanted. As far as the new changes in the taste demands that the distillers are trying to seek in whiskey, the basics that we can do with a barrel is to either change the toast or change the char or some type of a process on the used barrel as far as dechar, rechar or anything of that nature.
SYVERTSEN: Now, how would you take whiskey and take it out of a bourbon barrelafter four years and put fresh whiskey into that same barrel? In a real sense, that new aging whiskey in that now used barrel is going to taste how different from the first lot of whiskey coming out?
ZIMLICH: I have never tasted that, but it's going to be a little lighter incolor and of course there is a chemical reaction that takes place between the wood and the whiskey in the barrel. Crystallizing the sugars on the surface of the wood and the red layer basically give you your red color in your bourbon. Your color in your bourbon comes out of your oak. Consequently, you've extracted a certain percentage of that color or caramel layer out of that wood in your initial maturing. You're not going to have as much to extract in the next barrel.
SYVERTSEN: It would be a lighter color, but taste wise, is it going to tastemore woody?
ZIMLICH: I really don't know.
SYVERTSEN: I was just curious because, as you know, I think Canadian whiskeyscan use the same barrel what eight times or something of that sort?
ZIMLICH: Well, you know, Canadian whiskeys depend on how their pro cessed. Thereare some distillers, take ? Walker's opera tion which is Canadian Club and Walkerville, they take a barrel and they dechar rechar and they use that for their Canadian whiskey and they use that barrel for as long as it's a sound barrel which might be 20 to 25 years until it breaks down. Now there's other operations like say a Cana dian Mist which is owned by Brown Foreman, they don't dechar rechar and they go by what they call number one barrel, number two barrel, number three barrel which means that in all cycles that they are going to have a barrel which is a freshly emptied bourbon barrel which is number one. Number two barrel is one that's second time around and number three is the third time around. So, they fill barrel based on the three barrel ratio and they empty barrels based on the three barrel ratio. They actually color code the end of the barrels as according to you know what time around it is then when they put those in there they have them all color coded so that they know that they have the exact balance when they pull them out. They pull them out they have the exact balance. That's their method of controlling quality. Now you have to remember that today in whiskey that your color I mean your proofs of entry are far higher than they are in bourbons and your high proof alcohol estimation in Canadians versus 60 or less and bourbon's proof of entry is higher and, consequently, when you dilute you're going to have a lot less color, a lot less flavor out of the wood. You could also blend a lot of things in. They put corn whiskey. They put bourbon whiskey. They put rye whiskey and they have their Canadian whiskey. They can put caramel coloring. They can doctor this whiskey.
SYVERTSEN: Right, things you can't do with bourbon.
ZIMLICH: Bourbon has to come out of that barrel and it's the original bourbonformulation, primarily your corn, rye and mull, and the white oak barrel emptied, cut with distilled water, proofed, filtered and bottled and that's it.
SYVERTSEN: The standards in the industry for making barrels, is an industry widestandard or an interna tional standard or has there been?
ZIMLICH: Basically, the Cooperage Association of America has the standards.
SYVERTSEN: So that is the major association.
ZIMLICH: Yes and they set out as far as the grade standards of all types ofbarrels. One of the barrels in there is termed a bourbon barrel and then it specifies the quality of material that goes into the barrel. It also lists various sizes that years ago used to exist which eventually through the years everybody standardized on present size which is the 53 gallon barrel primarily because all whiskey warehouses and ricks in those warehouses were built to hold a certain length and certain diameter barrel. So, once you had all your warehouses built then you had to keep that standard.
SYVERTSEN: So did the association propose this standard barrel or was this doneby distillers primarily?
ZIMLICH: Distillers did it and, essentially, there was a lot of work done by Dr. Shipman.
SYVERTSEN: Frank Shipman
ZIMLICH: Yes, Doc always said that there is a direct relationship between thesurface area inside of a barrel and the quality of whiskey that comes out of it. So, they were maintaining a certain sized barrel in Brown Foreman because of the exact quality standards that they had. If you had more gallons in there, if you had a larger barrel, you didn't have enough wood surface to maintain those qualities then. Frank Ship man was a very influential and powerful man and respected man in the distilling industry. So, when he made a state ment there was a lot of people who believed in what he said. By the way, he came to the University of Louisville. I remember he headed up the chemistry department back in the late '30's.
SYVERTSEN: We have a tape which he did with George Ed Graves that was shortlybefore Dr. Shipman died which you ought to put into collection.
ZIMLICH: I'll tell you a story about Dr. Shipman. When I was a young engineer in 1958
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SYVERTSEN: Just looking at one of your pamphlets produced by the AssociatedCooperage Industries of America I noticed that there was a stan dard adopted in 1916 then it was revised in 1958. Do you have any comments on the standards?
ZIMLICH: There's always been, the basic standards I think have been changed tobecause of really the change in the white oak trees that we've been cutting and what part in the white oak price structure we're able to buy our white oak logs first stave and heading materials. The specs used to be written whereby it was always absolutely clear straight grained, could not be any defects in any way in the white oak. Well, on today's market place that is classified as a real top prime veneer log which a top prime veneer log today sells for $2500 to $3000 a thousand log of feet and we can only put $300 per thousand log feet into a barrel now. So, really, basically what the overall grade rules changes that have occurred has been to allow an agreement between buyer and seller to exist which the sellers will be rewarded for some of the so called lesser grade stave material that he has cut. There has been a whist, and as the logging indus try has gone from select cutting to clear cutting in many instances then there are a lot of smaller trees being cut and those white oak logs which are much smaller than 30 years ago now come up with a much narrower stave and, conse quently, we have to get into paying for by a standard a narrower stave than what we had in the past. All material in this industry is on a lesser width now than what it had been even though we pay for it by the same standard. We used to have staves that never averaged less than three and one-half inches in width and now we very rarely get an average above three inches. This is because we used to never allow into the industry anything under about a 13 inch log and now we down to an 11 inch log. We used to have logs that we up in the 16, 17, 20 and 24 inch. Now, because of all the material now is second growth material, it never hardly ever is allowed to grow much past 16 or 18 inches and a lot of it's still cut down in the 11 - 12 inch range. Consequently, we had to make some alterations to the grading rules to allow that type of material to come into the coo perage industry.
SYVERTSEN: Do you know if there is perhaps an average age of tree that is usedtoday for cooperage?
ZIMLICH: No, I don't know what the average would be, but I know that basicallyyou can't re-cut an area in less than about 40 years. In other words, if an area has been selected cut it takes about another 40 years for that oak to grow, the old saplings that were left to grow and then become suitable for re-cutting or for that same area to re-cut and it's about every 40 years on that particular cycle. I would have to say they are some where around a 60 year average on what we bring into the industry.
SYVERTSEN: Now, if you use a much older tree, does that affect the maturing ofthe whiskey?
ZIMLICH: You get a real old tree. By real old it might dead wood.
SYVERTSEN: It would be dead, but I mean a live old tree.
ZIMLICH: A live old tree, we get so few of them now days that some times you canspot the color. They are almost, the white oak is almost the red oak because it's so old. It has a little reddish tinge to it. One of the things which is one of the inherent prob lems in the older tree is most of them have been through a lot of wind storms or tornadoes and if a white oak tree ever gets bent, it gets twisted. It develops a wind shake in it and that wind shake will give you split down to the grain. So, when you cut that material into a stave, a lot of times you don't see until you get it into the plant or you don't see it until you got it into a barrel and you got water in there and all of a sudden you start seeing water starting to leak out and what it was was a wind shake where that tree was twisted and bent when it was a younger tree and just grew and grew and grew and it covered that section up and then that's a defective stave and we have to take it out. In certain areas you have to watch that very closely and primarily you watch it very closely if your cutting any older material. They've been around long enough whereby the chances they've been through heavy wind storms or tornadoes are probably much more prevalent that what would be for a younger tree.
SYVERTSEN: You mentioned to me earlier that you char a barrel for about 41seconds. Was there an industry standard on the amount of time for charring or the amount of depth for charring in 1945-1950 or was there some variation in the industry?
ZIMLICH: There is variation. There still is variation in the indus try. Itdepends on the type char. We have what we call four number char--one, two, three, or four. The number one char simply is a charred area with very little divarication as far as lines in the char and you can go up to number four and it looks like a heavy alligator liner that has a dis tinct pattern where it's been burnt deep. Normally most distillers have said an eight of an inch on the char. Now, there's no time as such universal to any plant or in the industry because it would be a time restricted to an indi vidual plant and the characteristics of the equipment which that has and also how much time the material has been on a dry fire. There's a distinct difference in char time if that barrel cools down before it goes on to the char furnace versus if it comes off the toast or the dry fires on in to the char furnace. The barrel is still warm and, therefore, you get a lot more burning on a hot barrel than you do on a barrel that's cooled down. The same thing is true on the moisture content of the oak. So, it really depends on what type process you have. In our plant, we maintain the 41 seconds to come up with an average char. Now, if we want the heavy alligator, we'll go up to say 43 seconds. If we want a number two toast or char, we'll go down to say 39 seconds. It really depends on what the distiller wants and how well they want that barrel charred. There is no indus try standard. It's individual plant standard as far as what it takes in that plant to come up with the desired char. I would say that the industry standard is only about an eight of an inch as far as the char depth on the interior of the barrel.
SYVERTSEN: Does the amount of char in the barrel affect the desirability of thatbarrel for say as reuse by a scotch producer? Does it make any difference if it's a heavier char for a scotch producer or a lighter char?
ZIMLICH: No, for instance, a Canadian Mist they know what type barrel we have inour distilleries and they know they get consistency then if they get their barrels from one supplier. Like the scotch people, they buy a certain per centage from one distiller and one cooperage plant and another percentage from another as long as they keep that same plan they are going to keep the consistency in their product and that's primarily what they are all interested in. If they keep the same ratio in number, they can keep the same consistency.
SYVERTSEN: We've talked about the standardization of the barrel size what aboutother changes in the barrel since 1945 or so to the present. How many staves were there previously used to make a barrel versus today? You've reduced the number of staves in the actual barrel I presume because the staves are not as wide as there were.
ZIMLICH: Then, therefore, it takes more.
SYVERTSEN: Excuse me, therefore, it takes more. Excuse me.
ZIMLICH: It's changed. You know we've been down to 24 and 25 staves in a barrelsay back in the early years and we're say 27-28 and then as high as 29. Some cooperages run on 30 to 32 and they always have. It just depends on how that shop runs. As the average width of stave drops, the number of staves in the barrel increases. We used to always run four and five piece heading which means that there were four or five pieces put in each head. Now it runs six and seven sometimes eight piece heading. It's a narrower width and it's a fact that every cooperage shop has to try to maximize the amount of material that they paid for that they can use so that they can keep their costs in line because heading material is the most expensive thing in a barrel, there fore, you strive every way to use every possible piece of oak that you have. As far as the capacity, the size, the number of pieces, a barrel used to be made a full inch thick and now it's fifteen-sixteenths of an inch thick. The capacity of the barrel has changed slightly, but as far as any other basic changes, we've only had to change the number of hoops. All barrels used to be eight hoop barrels and now we're down to six hoop barrels. That change was probably the last. The last distiller we made barrels for who had the eight hoop barrel was Jack Daniel. They changed the way and the reason why they didn't want to change the way was because they had thought that because of their type advertising which showed the barrel and everything through the years that they always had featured the eight hoop barrel and all the old history of Jack Daniels had eight hoops. It was a big decision for their marketing people to make to break the six hoop barrels. Even though they were selling whiskey, they were worried that this change from the six hoop to the eight hoop might reflect a change in the whiskey itself. People in the distilling industry were very, very cautious about any change. Just like I spent some of my years in bottling in the distillery at Brown Foreman and when you put a label on a whiskey bottle in those days you made sure it was absolutely centered, absolutely square, and absolutely perfect. No glue slopped out anywhere, because the overall thoughts then were was that if you showed any carelessness in the packaging of the whiskey, that would reflect carelessness in the product itself which could be picked up by the consumer. So, there was all that image projection on everything from the barrel to the bottle to the label. The whole industry was very conscious at that time that everything had to be perfect and the costs were tremendous in trying to maintain that quality standard.
SYVERTSON: By using more staves in a barrel do you reduce the possibility ofleakage? Does it have any affect on the leakage factor?
ZIMLICH: One of the things which we have found over the years is the wider thestave the more susceptible it is to cracking and rupturing because of the stress and the age of the whiskey during the Summer-Winter cycles. The expansion/contraction of the barrel itself, the wider the stave the more it would crack. The narrower stave would be able to bend and return to its original position without breaking. Every wide stave that we got back had either a hairline crack or severe rupture. We found out that in today's barrels that we get back for processing for used barrels we have far fewer cracked staves in today's barrel then we did in barrels earlier simply because the number of staves. Now there is another aspect of it. The more stave joints you have, the more likely it is that your going to have a leaking barrel, because you have extra joints that you're trying to seal off in a barrel. You know, if you went up to 36 you may not have as many cracked staves, but you would have a lot more leaky joints, because every joint won't be perfect. So realisticly, somewhere in the upper 20's I think is ideal for barrel manufacturing.
SYVERTSEN: The swelling that takes place when the barrel is steamed, how muchswelling is there? How do you mathematically treat that?
ZIMLICH: Actually, when we steam the barrel, we steam it so we can bend it, andthen it goes from let's say the windless to the dry hard. The dry hard is then to remove all the moisture out of the wood down to say the basic dryness that it had in kiln drying. The barrel, at that point, is very warm and hot and that, because of the temperature of the wood, had caused the barrel to swell, and then the additional heat during the char has gotten the wood very hot. We have to hold it for several hours to let that temperature drop down to room temperature or close to room temperature, so that the barrel will then shrink down to the approximate size it will be when it's filled with whiskey. That varies anywhere from a half inch to an inch, but that barrel will shrink down once it cools down.
SYVERTSEN: A half inch to an inch
ZIMLICH: The old cooperage shops, see we have a conveyor system that takes thebarrels around, and we have air movement through there, which will always be drawing air across the barrel. It cools down. In the old cooperage shops that didn't have that type system, they would make the barrel up, put it in the warehouse, and let it sit overnight, and then bring it out the next day and put the iron on it. They broke up their manufacturing operation into what they call the hot barrel and the cold barrel. The hot barrel was made and then it was set off, and then they would bring in the cold barrels back from the previous day out in the plant for the ?, ?, inspection and shipping. By our conveyor system, we are able to complete one day of work, complete the entire barrel in one day. One of the things that happens even in our operation in the summertime, if we make barrels for more than say a week ahead of time and have them stacked up, and it gets real warm in the warehouse, all of a sudden you can hear all the hooks dropping off the barrels, and if you leave a barrel in a warehouse for a month or two in the summertime, it will all dry out, and you take the water and air pressure on it, it will just simply lose everything. It won't hold anything.
SYVERTSEN: So, you can not store barrels that long.
ZIMLICH: That's right. So, you really make a barrel for shipment. It's difficultto find an adequate time to shut a cooperage plant for maintenance, repairs, and vacations, because all distillers don't shut down at the same time, and you can't tell a customer that look we're going to shut down, you get your sells from someone else. So, every Summer we have to store barrels, and we try to plan our shutdown so that it coincides with all our major customers or try to span it somehow so that we have to have the minimum number of bar rels in inventory. So, we do this and we still have to bring a crew in so that when those barrels come out of the warehouse we have to run them back through and rehoop them to grab the hoops tight.
SYVERTSEN: You just can't resteam them?
ZIMLICH: You can steam a barrel. Years ago, one time we had a person who ranthis plant who rather than lay anybody off for a short time, he would run up the barrel inventory to 6,000 to 8,000 barrels in the warehouse and you had no place to go with them. So, they'd have the whole warehouse stacked up with barrels, and come summertime, you had a hell of time trying to get those barrels down out of there, because all the hoops had fallen off and it was just like a bunch of sticks stacked up, and, in order to bring all those barrels back in, and we didn't know what to do with them, so, what we did, we developed the steam line back there that had a whole bunch of steam hoses on it. We'd roll 20 barrels on this run and put the steam hoses out and they let them steam for about 20 minutes, and that steam in there would allow them to swell up enough, whereby, you could then go ahead and redry and tight them up. Then we shipped them off for filling. You really don't like to do that much, because you don't really know if you are going to have the same basic quality on the interior of that barrel by steaming it as you would have if you had just had normal processing.
SYVERTSEN: What happens when barrels are shipped abroad for reuse by a scotchdistiller? I presume he's got a problem, because of the temperature changes on board ship and so forth with the hoops staying on and leakage and so forth.
ZIMLICH: One of the funniest things that ever happened, was when we wereshipping used barrels over to Scotland, stand-up, these were not knock down, and I got a call from the customs office in Baltimore, Maryland, that they refused to accept our delivery of so called used whiskey barrels in a sea-land container, because there was whiskey running out of the doors. What had happened, these barrels were freshly emp tied, which is what they want, and we put these used barrels in the container and shipped it on, and it was a very, very hot Summer, and the heat inside of that container had sweat ed those barrels, whereby, literally whiskey was coming out the door of the container and had had that door sealed and the customs officers would not permit that to be shipped as used whiskey barrels, because they swore it had nothing but whiskey in it. We finally got that cleared up, but under unusual conditions you have that type, but we put the wooden ? into the barrel on a freshly emptied barrel, and we ship to direct as per their filling requirements, and what we ship they fill. Now, fortunately, in Europe, like in Scot land and Ireland, they don't have the real severe summers that we have, so they are able to hold them much more better than we are.
SYVERTSEN: Now, but you do ship them with the hoops on them. You don't usuallybreak them down.
ZIMLICH: Oh, yeah. We used to break them all down for some people. In fact,Ireland used to buy them all broken down and they reassembled them. They did that because we get 215 barrels in a container, and a container costs x number of dollars to ship it across to Ireland versus 400 knockdown barrels in a container, so their freight costs were almost half what they were on a stand-up barrel, but they weighed that against their own labor costs for reassembly, but then the coopers trade was one of the most powerful trades in all of Europe. They always had labor problems, and they were always shut ting down their distilleries and bottling plants and every thing in the scotch industry in Ireland. So, every distill er then tried to work his way out of the cooper age trade. Eventually in Ireland, in the past several years, they have closed down all their cooperage plants. They had a long negotiation for the Labor Secretary in Ireland and there were all kinds of problems and the priest that worked with the distillery as someone who tried to mediate the problem, and the way that they finally got rid of their hoopers, but the head man in the cooperage trade now has to come by, Frank, I forgot what his last name is now, he has to come by, and he's on the payroll still, and he comes by, and he has to inspect the barrels once a month when he makes a trip down to make sure that the barrels they are receiving from us are according to their standards. Actually, the coopers trade people still have the right to accept or reject any barrels that we sell to the Irish distillers even though we're not selling to that group, they still have the right to prove that those barrels are satisfactory for Irish whiskey. In Scotland, the coopers trade was so powerful that they are actually awarded a plaque by the Queen of England once they are a bonafide licensed cooper. That's one of the very honorable trades and crafts. They have such power that a lot of sometimes. . . well, the union trades in Scotland and Europe anyway are so powerful compared to this country. It's hard for me to understand. I, you know,
SYVERTSEN: Well, they are part of the political party.
ZIMLICH: Yeah, right. They come in to see how we operate and how we deal withour work force, which is how they have to. The work force tells them what they're going to.
SYVERTSEN: The head for the barrel, has there been major change in the head? Irealize from what you said earlier that there are more staves used in making the heads today than in 1945, but the dolling of the head and the making of the head, it is much different now then it was?
ZIMLICH: Everything is the same, except we used to use flagging in between thejoints. In other words, we used to have the o axe. What we used to do is drive each dowel pin in the dowel pin hole by hand, and then once the two dowel pins were in the head, you take one slap across the end with the axe, and that would take and just leave the sharp edge of the dowel pin extended, and then we took a piece of flagging, which is a piece of reed, and put it down along the entire joint of the piece of heading, and then the next piece then would be laid on top and driven down tight, and that flagging would swell inside that to seal off that joint. The old thinking used to be that you know you really can't make a tight head joint that would hold in a barrel without leaking. Well, we finally got around not using flagging, because it was a very expensive thing to use, because it increased the labor costs on manufacturing of the heads. So, in order to make the operation more efficient, we finally got away from the flagging in the head. The flagging is what you saw that cooper putting in that piece that chip out in the head area, but every joint and every heading piece had to use a flag so that it would seal. The only other change that has occurred is just the basic size of the head. We used to be 20-3/8 and then 20-l/2 and then 20-5/8 and then 20-3/4, where we are. All the other ones now are either 21 or 21-1/4, but we're still 20-3/4.
SYVERTSEN: The organization associated with the cooperage industries, are theypushing or have they historically pushed for a world standard for barrels, for distilled barrels?
ZIMLICH: No, because, I think, every industry in every country has its ownstandard based on what their requirements, what their product is, and what quality they are looking for their product, and what type of warehousing sizes that they have. So, the people who have standardized on the American size barrel, those who always buy the American barrel which has been used once, Canadians, just about every country uses the American size barrel now. The ones except Spain, Italy, and France, all in the wine and sherry industry. The French barrel is still sold out in the California wine industry. We sell barrels there also, but the French barrel is a slightly different size.
SYVERTSEN: But you do sell to the wine industry.
ZIMLICH: Yes. It's been a long hard sell, because for years, you know Frenchwines have always been the cadillac of all wines, and Americans try to duplicate the French wine, and through the years, they always thought that the French oak contributes more to wine than American oak, and they could n't ever find a way to get . . American oak is a lot harsh er in the taste contribution to a product than say a French oak. The French oak is much smoother as far as the tannics. Tannics are very high in Ameri can oak versus French oak. Consequently, it took a lot of selling to convince some California wine makers to try it. Well, when the French oak barrel got up to $300 and they could buy an American oak for $60, it made them think. So, they started thinking. They started trying and we worked with mandavi on all types of tests for wine barrels. We had some, we picked every dif ferent region
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ZIMLICH: This is one of the later tests we ran with mandavi and . . . See theseare various samples of a . . . that's medium char. . . that's French oak right there. . . there's light char. See here's a type, on 66 barrels they wanted to run these tests. 48 barrels were densest, tightest oak available for a two year air dry . . . and they want to test it this way: 8 barrels, fire only, normal toast; 8 barrels, fire only, light toast, thin toast and steam and fire, normal toast, and steam and fire, light toast; steam and fire, heavy toast, and 12 barrels made the same way, 6 . . . , 6 air dried, dried normal time, 6 barrels made . . . but, you know, this is when they were trying to get into it just to see what the affects an American oak barrel would have on their wines. Since that time, we don't really have a whole lot of this in California, but as soon as we started toast ing the barrel, it has removed a lot of the undesirables.
SYVERTSEN: So, some of the tannic will come out.
ZIMLICH: Yes and we have some customers, who once they win the blue ribbon ontheir wines, they'll call and say, "What area was that wood from that oak in our barrel, because that was just perfect." I've got customers who call and say, "Set me aside X number of barrels air dried for two years and make sure its the ? machine material." Paul Draper at the Ridge Winery in California, he is a high quality wine maker and he thinks that, you know, a certain region, certain process from Bluegrass Cooperage will give him the exact characteristics he wants in his barrel, and when he gets his barrel, he'll tell me how great the wine is out of it. A lot of other people are the same way. They are so conscious about the fact that if they would switch the cooperage that they may end up with a different type of characteristic in their barrel that if they put their wine in your barrel and it comes out to their taste satisfaction, they just call and tell you that they want that same type, same product, same wood, and right now, the California wineries are really in the same position that the distillers were back when the bourbon industry was moving along real strong and they put their trust in the cooper when bourbon sales and flavors were most desirable and a lot of trust was in the cooper about how the barrel was made. Now California wineries have their trust in the cooper, because once they come up with what they want, they trust the cooper in satisfying that same type need and doing it year and year out as distilleries did in the past. However, the numbers that the California wineries take are far less than what the bourbon industry has ever taken. We're talking about 5 or 10,000 barrels a year in the California wine industry. It's very small, but it still gives you a great deal of satisfaction to know that some of the old thinking that you can't make a good wine with American oak is now just getting to the point where they think they can make a good wine. In fact, I had an individual in here from Baringer's last week who said that he thinks they prefer the American oak over the French oak.
SYVERTSEN: Well, that's a major change. That's fascinating.
ZIMLICH: So, it's been a long hard . . . and one of the things that the Frenchoak barrel. . . its difference in size and they do a good job, and, of course, they've come from many, many years of history as far as French wines. The wineries associate with French wine with the French cooperage and the contribution that the cooperage had to make to this and to the wine itself.
SYVERTSEN: I gather today that the . . . going back to the barrel, the majorleakage occurs at the bilge on the barrel. Is that the area rather than saying the head or in the lower ends of the barrel?
ZIMLICH: No, no, I would say that probably the greater potential leakage area isin the crows area, which is where the stave and heads come together. If you're going to have any prob lems in the bilge area of the barrel, which is the largest diameter, will be because it's like a lung that barrel is. It breathes like this and, therefore, the maximum extension is right in the bilge area and might crack more potentially in that area than it would be down in the area where you have more steel hoops holding it all together. There isn't as much movement in the quarter section or the head section. However, there is more critical areas of the barrel where all staves come together and form the crow and cut the crow to make the head fit tighter.
SYVERTSEN: That's the most critical area for leakage.
ZIMLICH: There's a lot of things we have found out about that area. You can'tmove the bead on that head around much, because you'll really develop a leak in the head area. In other words, the most critical place we have to watch around here for leaks is in the crows area. The second thing is the defects in the woods such as streaks or ?, mineral streaks. If we eliminate mineral streaks, if we could find a way of nature to grow trees without the mineral streaks in them, then we'd be in good shape in this industry, because those are the major areas in which we have problems. We really can't afford to cut out all the mineral streaks and throw that much material away.
SYVERTSEN: I noticed in the tour of the plant that there was very little wastedwood or wood that had been pulled. Apparently, you have it so well fine tuned that you don't often have to pull out a whole stave or a heading.
ZIMLICH: No, see we have check points along the way. If you don't put ittogether right in the first place, you'll have prob lems at the final inspection. So, we try to work the back in and make sure things are done right in the first place. Defects in the wood, I would think that the major changes in material that comes into the industry today as compared to 30 or 40 years ago
SYVERTSEN: In other words, the wood is not as good as it was. I mean the virgingrowth tended to be free of mineral problems and so forth.
ZIMLICH: I think so. I really wasn't here for the processing of it, but fromwhat some of the old timers tell me, I think that's true. I see more mineral streak problems now, however, the higher the entry proof on the whiskey in the barrel, the more readily it could dissolve the mineral streaks, which can cause leakage. So, back years ago when the entry proof was 103 proof, it was a lot less and would penetrate the oak a lot less as far as the streaks and what have you. You had less leakage because of that. As we're up to the 125 proof, you have a higher ability to dissolve the mineral streak and you have a higher rate of leakage. We can see that in distilleries who filled at a lower proof versus the higher proof now. The complaints we get back from a distillery who fills at let's say 110 proof or 112 proof versus 125 proof, we have a lot less difficulty in the lower entries than the higher proof entries. Therefore, we sometimes have to watch the mineral streak problem a lot more readily on certain distilleries rather than others.
SYVERTSEN: On bourbon production, does the mineral streak have much impact on taste?
ZIMLICH: No. I don't think it has any effect on taste.
SYVERTSEN: Just a problem of leakage and the handling of a barrel I guess.
ZIMLICH: Well, see we fill a barrel and you put 53 gallons in it on filling itand when you empty it you've lost somewhere between 18 to 20 percent or greater depending on how that warehouse condition was during the turning of the whiskey. Warehouses where you heat, you know artificially heat and cool, you have much higher outage than in just a warehouse that sits naturally, but also you get a lot more maturity of your whiskey by cycling than you do in one that sits and just ages naturally. In essence, you're probably getting six years of aging in three years on an artificially cycled warehouse versus a natural warehouse.
SYVERTSEN: On the barrel head, do you sometimes partially dip them paraffin orhow much paraffin is usually used in the industry today on a barrel head to reduce the possibility of leakage around the edges?
ZIMLICH: Well, we just roll the bead of the head.
SYVERTSEN: Just the bead itself?
ZIMLICH: Yes. The old theory was, you know, if you put that paraffin head intothe barrel when the barrel has been charred, then that paraffin will melt around and seal off the ? section of the barrel. Well, you know, the old theory that Frank Shipman had was that it saves a gallon, I think, out of every barrel. Well, Seagrams says, you know we put a dif ferent sealer on the end of their barrels, and they say that their process use two gallons over anybody else. They don't want any paraffin. You know they say that on top of that savings from the paraffin that they save another two gallons by putting this g-on coating around the ? of the barrel. I don't really know what to say, because if there's any, other than when I came into the industry, everybody paraff inned their heads. So, it was just an accepted way for making barrels. I'm sure the tests they used back then showed that paraffin certainly did benefit the outage. The great bene fit it has in our operation is because the paraffin on the bead of the head. It allows the head to slide down into the crows very easily. It's very difficult to get the bead to pop into that crows unless it does have paraffin on it, and our people com plain whenever we make some wine barrels that don't have paraffin on them. It has become an easier way to head up a barrel, so to speak. It became a manufacturing benefit for us whereas it reduces the loss for a distiller.
SYVERTSEN: And there is no need to totally paraffin the head itself, becausevery seldom do you have leaks around the rest of the head. You just have it on
ZIMLICH: Well, if you paraffin the inside of the barrel, you're not going to
SYVERTSEN: No, not the whole barrel, I mean just on the head itself.
ZIMLICH: The hole inside of the head?
SYVERTSEN: No, on the outside hole to prevent leakage. In other words, that'snot a big leak factor on the rest of the outside surface of the head.
ZIMLICH: You know there are tests going on now as far as coating the outside ofthe barrels with certain types of chemicals and some of them are spraying the outside with paraffin to see what the effects are. Those projects are in operation now; however, for you and I, they have had a lot testing going on, a lot of things, and I still haven't seen any positive change in any way for the industry. We're still doing things the way they've been done over the last nine years.
SYVERTSEN: We had a tour through the plant earlier. Is there any major change inthe machinery that's being used today versus, you know, in the last 30 years, major new innovation machinery wise in the industry, not necessarily here but I mean just industry wise?
ZIMLICH: I guess the biggest improvement was back in the late '60's. We used tohave hammers and we used to go around and have to knock out the hole inside every barrel. Men would knock it out so it would be rounded on the exterior, and we hand levelers where, if you put a barrel on, you'd shake it, so that all the staves would come down level. We then developed a so called buffalo machine, which is what that big machine is that takes the tresses, levels tresses, and rolls out the machine. That's probably been the biggest labor saving and most developed machine in the industry. You go back to all the other operations, the joiners, the joiner wheels, planers, those are all basicly the same. I guess the biggest change in the industry in the last 10 years has been the fact that in the rough sawing of the stave and heading material we don't use a drum saw any longer. We now run them through either a band saw or a circle saw then we saw everything flat, and then we plane the curvature into the stave here at the plant rather than sawing it into the stave at the saw mill. I think, you know, that change has been probably the greatest change in the industry of the manufacturing of the raw material. We've developed other machines at this plant such as heading rounders and, you know, getting rid of the flagging in the heading operation and getting away from the old belt driven, long drive chassis belts, you know, driving pulleys on machines, and line we've gone to. A lot of machines now are hydraulic as the old ratchet pinion type machinery. Those kinds of things have been changed.
SYVERTSEN: One of the problems in the industry in the past has been the factthat there would be certain outages caused by people in the long process of maturing the whiskey siphoning from the bung hole area. Did the cooperage develop a type of plug for the bung which would reduce that or did they have any impact on that whole problem industry wise?
ZIMLICH: Well, we used to have a solid walnut bung that we used to put in abarrel. Now they have a poplar bung, but either bung, all it takes is a pop with a hammer on the exterior of the barrel and that bung will pop out. So, I don't think even the barrels today are pilfer proof. I think we went from a walnut bung to the poplar bung primarily because ? There is still only one distiller who uses the old walnut bung and that's Maker's Mark. They still use it.
SYVERTSEN: I was thinking as I was asking you this question that this issuecould be a little more important perhaps in the case of bourbon, which is shipped bulk overseas. Is that true?
ZIMLICH: Yeah, I think, in that case, they put, I'm not sure, but I think theyhave a metal strap that they nail across the bung to keep it in.
SYVERTSEN: Can I ask you about your labor? Are these people mostly unionized orentirely unionized or are there several different unions involved in the cooperage production? Industry wide, how does that hold?
ZIMLICH: Well, our plant here is 100 percent union. For years it was oneinternational cooper age, which had every cooperage shop under its jurisdiction. At that time, all the cooperage wages were pretty well standard. Once one contract was, National Distillers negotiated a contract, their contract would fall pretty much in the same settlement pattern, and then, through the years, a lot of dissatisfaction occurred and our people then pulled out of the Coopers International Union and formed their own National Independence Coopers' Union, which is what we still have here as far as the major production workers. They are in competition with the old union. They have another union, the ? and oilers, who represent our power plant people and the maintenance workers and then you have the guards union, which represents the guards. All of our production workers are in the independent coopers. . . Through the years, you know, the one person in charge of all the cooperages in the United States as far as the union activity, it was very difficult for a distillery to get a barrel from anybody else if that distiller owned a cooperage shop and he wouldn't settle with the Cooperage International Union. The Cooperage International Union made dog gone sure that he couldn't buy his barrels from one of the other cooperage shops. So, he was really put on the spot. If he wanted to make whiskey, he's going to reach a settlement. Eventually, we got our people, we didn't encourage our people they broke off, because they were paying union dues and didn't think they were getting proper representation, and where the president of the union made his inevitable mistake was, at their national meeting, which occurs each year. At one time this was the largest union in his organization. So, I think they had two or three members on the executive committee or on the board. When they arrived for that meeting, the president had called the meeting to order the day before and had an election of board members and had these people re moved and had his people put in. So, that alienated our work force here to the point where they eventually defected from his union to form their own.
SYVERTSEN: Historically, since 1945, I gather that the cooperage unions have notbeen very strike prone in comparison say with other unions in Kentucky.
ZIMLICH: I think we've had two strikes here since the mid '60's and, as of now,I mean with the industry as it is and with the activity in the industry as it is, it is very easy to point out to the membership, look, if you want to be the survivors and if you want to continue to survive, we want to be com petitive with all our competition. You remind them of the days when they were all working full time and working five days a week and a lot of the other fellow union brothers with other unions would come by and couldn't see how they could be working every day when they couldn't work at all. As the industry gets less and less, the possibility that that could happen to our people here is pretty severe. There are not many survivors in this industry right now and if they want to be one of them, they had better do their fair share to make sure that we're going to survive. They all recognize that now. What we worked out is, our contract was to expire this year and last year I went to them and told them what our situation was and they agreed to an extension of our existing contract through June of '89 with no change. They are recognizing the fact that this industry is not as sound as it had been the past. It's going to be the survival of the fittest.
SYVERTSEN: I noticed there was at least one woman at there working in the plant.When did women become coopers?
ZIMLICH: We've had a lot of changes as a result of being an equal opportunityemployer, but through union seniority we ended up with a lot of restrictions in this plant. For instance, up until the early '70's, about 1972 or 1973, we had opera tions where just through the course of time in one depart ment would be primarily blacks and blacks were not ? and there were no women here at all. What had happened was that, you know, as a black would come in or a white would come in, it just seemed that when a black saw someone that he felt confident with, this is where he would go. We then had departmental seniority, which meant that you developed seniority in that depart ment. So, in essence, there were a lot of blacks who had been here for a long time, because they had ten years seniority, and if we curtailed the pro duction in that one department where they were, they could have gotten curtailed out and didn't have any qualifications to perform any jobs elsewhere, therefore, the only jobs they could do were laboring jobs, because they didn't have any seniority or skills to roll anybody else. So, in essence, we were in violation of the Equal Rights Act and, conse quently, we then went to the union and said we've got to get rid of departmental seniority and all opportunity to earn income and all opportunity to bid on any job and all oppor tunity at Bluegrass will be based on general seniority, and then we had to retrain and offer jobs to everybody here throughout the plant. Then as we began to hire people, we then made a conscious effort to hire women, because we didn't have any women, but because of the decline in the industry, we haven't had much opportunity to hire many people, but we have always tried to hire women. We would have had a lot more women in our operation now if we were an expanding production facility as opposed to a declining production facility; so we just haven't had the opportunity to bring many women in. The women you see here now were brought in in 1978 and 1979 when we hired ? crew.
SYVERTSEN: I know it's lunch time and I don't want to tie you up any further,but I had one question I definitely wanted to ask you to round this out. Looking ahead in this industry, do you have any specu lation that you can talk publicly about as to changes in barrel production that you really anticipate? I realize some of this may be betraying corporate secrets. I mean is there anything publicly that you can discuss?
ZIMLICH: Well, the only thing that concerns say someone in the coo perageindustry the most is the declining requirements for new barrels, which is a result of higher proof, lower bottle proof, and the declining consumption of bourbon. So, you have all these factors working you and with those basic factors working against us, we've dropped from 3,000,000 barrels a year to less than 1,000,000 barrels a year. Now we're confronted with the possibility of perhaps a lot of the industry going to a used cooperage or some portion of used cooperage. You can speculate that they are going to put half of their cooperage in new and half of it in old. We're looking at an industry which at one time was 3,000,000 barrels a year to an industry which could end up with maybe 500,000 to 750,000 barrels tops. So, when you look at this industry as to where the future is, it's not really an industry which you would recommend to, say your next genera tion, this is the industry to get into. There will always be, in my opinion, barrels made, but as far as the number of companies it's going to take to make those barrels, it's not going to be very many. One of the problems, also, is it takes x number of units to cover say the operational over head of any manufacturing operation, and with the few number of barrels that will be required in the industry and then with the overall consensus that there's only one barrel maker and he controls the price and profit he's going to make on that barrel, the distillers are leaning and going to help one distiller or one cooperage against the other. They will make sure there's competition. Now with competition out there and both are or however many number of cooperage shops are remaining, both of them striving
(End of tape 2, side 2)
(Beginning of tape 3, side l)
ZIMLICH: And with the number of cooperage shops that are potentially going tosurvive and they are all striving for the number of units to cover their overhead and all trying to get the maximum number of barrels to be manufactured for any indi vidual year will result in a severe price cutting, which is not going to result in a profit or respectable profit in the industry. The question is how long does a distiller or someone want to keep his money tied up in an industry, which really doesn't have the potential for generating a respectable profit. We may end up in the industry with say every distiller, all distillers grouping together and form ing a so called cooperative cooperage whereby they would have a source of barrels at a respectable price. It might be to their advantage if everybody did team together if the barrel requirements stay this low so that the prospects of one cooperage shop surviving and gouging the rest of every one else can't exist. On the other hand, if there's two around and if there's not enough barrels to be manufactured to make a decent profit, because everybody is trying to get enough units to cover their overhead, then we're going to end up with no profit, and, consequently, the situation is not going to be a good investment for a distiller. If we go the route that a distiller gets out of this industry and we go the route whereby independent suppliers supply all bar rels in this country and there's no control over quality, then who knows what the end effects are going to be on the cooperage industry. We may lower the overall standards to the point where no one even knows what the old barrel used to be. So, consequently, I think there's got to be a dis tillery involvement in the cooperage industry to preserve the quality standards of what's necessary to maintain some of what has been developed over the years as far as the quality standards necessary for maturing whiskey. Since the profit won't be there perhaps for one distiller to continue in the industry, it may have to be a cooperative made up of the entire industry to ascertain that over a long period.
SYVERTSEN: That's a very interesting statement. I want to thank you on behalf ofthe university for the project, for all your assistance and cooperation. Most informative tape. We appreciate it very much.
ZIMLICH: I'm sorry I can't give you more information and background on things.You know one of the things which really had lead this industry to a lot of difficulty is the fact that all the distillers owned the cooperage shops over the years and all the work force felt as if every time the distilling industry got a pay increase and any benefits that the coo perage industry, which was owned by the distilling industry, went right along with them. So, all the French benefits, all hourly wages and everything went right long with the distilling industry, and then all of a sudden the distillers dumped the cooper age shops and leave one or two in competi tion with the only cooperage shop who was not owned by a distiller who doesn't have any of their French benefits or any of their wage structures or anything and all of a sudden dumps him out to be competitive with somebody who they didn't put in this high paid is now putting us in that position. That's one of the big sins of the distilling industry. ? they went along and paid all these high wages, high French benefits, and didn't keep the cooperage industry, which basically is a wood industry, in line with the wood industry by itself. Wood industry is a far lesser paying industry than the cooperage or the distilling indus try. So, consequently, we're paying much higher wages and French benefits than we would normally would have paid and would be in a stronger competitive position if we could have negotiated from '45 on and kept our wage structures in line with the wood industry not the distilling industry.
SYVERTSEN: Very interesting statement.
ZIMLICH: At any rate, I hope that's all taped.
SYVERTSEN: Thank you once again. I appreciate it.
Oral History Transcription Bert Zimlich Interview
Tapes: 1986-113:115 Distillery Transcription Project Page:
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