These are some of the answers to questions we asked in the process of vetting this program.
(Click question to reveal answer)
What is white dog?
White dog is the most common way to refer to the clear liquid that results from the distillation of the water and grains mixture, referred to as the mash bill. It is un-aged whiskey. All whiskey, whether it be bourbon, rye, wheat is white dog when it goes into the barrel. It is un-aged whiskey.
What is included in the all inclusive price?
This program includes all of the services and protections required to age your product and protect your investment.
- Distillate: 65% Non-GMO Corn,15% Rye, 20% Barley finished white dog
- Barrels: New American Oak Char 3 Barrels (Black Water Barrels 53 gallon–Value $210)
- Storage: 3 years in our managed bonded warehouse
- Taxes: We pay all fees for as long as the product remains in our bonded warehouse. ( You or the end buyer will be responsible for federal excise taxes per gallon when you bottle the product, or if you choose to remove the product to a non-bonded warehouse for additional aging after our 3 aging years with us.
- Warehouse Management: All services are included from load-in, weekly barrel-inspections, leak repairs, quarterly testing samples sent to you, dumping into your totes.
- Insurance: Per barrel protection against loss with coverage by the Cincinnati Insurance Company. The insured values are based on the age of the barrel at time of loss, with payment pro-rated based on the schedule that is verified by the underwriter at the time of contract.
- We will even sell your product on your behalf should you choose not to bottle it.
How much does this save me compared to purchasing bulk barreled from everyone else who charges handling and services fees?
On average, the rates that other bulk producers charge for all of the services we include add at least $400 to more than $600 per barrel for a 36 month aged product. So when comparing costs, our all-inclusive program significantly increases your ROI.
There is a price drop of $100 per barrel when buying at higher volumes which is how you can save more than $600 per barrel.
What happens to the barrel?
Our all-inclusive pricing includes dumping and empty barrel handling. Everything except the cost of a Tote (which we can provide for $197) or you can provide your own for us to fill. If you want to keep the product in the barrels when you take possession, there is a $60 per barrel charge. This would make the total cost $1540.00.
How does the insurance coverage protect my product?
Every barrel in our bonded warehouse is covered against loss under a policy with The Cincinnati Insurance Companies. We verify inventory on a weekly basis so you can be assured that as additional barrels of product are laid down for aging, and others may be removed upon maturation, our coverage will remain current and in force.
The insured value is set by the insurance underwriter, at the time of contract.
As of April 2019, the insured values are:
$1730 for 1 year aged
$1920 for 2 year aged
$2300 for 3 year aged
Where is the aging warehouse, and what are the aging conditions?
The Davis Valley Distillery is located in Rural Retreat, Virginia which is in the southwest corner of the state, just over the Kentucky border. This is where the mash is made, where the high limestone water comes from and where our white dog is distilled. Our aging warehouse, is located about 45 minutes from the Kentucky border in historic Saltville, near the North Fork Holston River
In Saltville, the summers are long, warm, and humid; the winters are short, very cold, and wet; and it is partly cloudy year round. Over the course of the year, the temperature typically varies from 28°F to 82°F and is rarely below 12°F or above 89°F.
Our warehouse is open air, with heating to allow us to maintain 45-50 degrees in winter. It is a one story aging facility, with barrels racked no more than five high, so there is minimal variation in conditions.
How will these barrels be handled while they are in your warehouse?
Once the barrels are laid down to age in their racks, our warehouse staff will inspect weekly to fix any leaks, and we will pull a sample for you to test every 3 months. Other than that, we do not rotate barrels, or move them once they are put up for aging.
How will I know that my product is aging well?
We include testing of select barrels once per quarter. We will draw a 200 ml. sample, lab test if for alcohol content and flavor profile, and deliver it to you via UPS.
That’s four included test samples per year.
If you choose to have additonal samples sent, there is a $50.00 fee for each additional sample and lab result. These are the only additional fees we have.
What is the difference between bourbon made and aged at our facility in Virginia vs Kentucky?
The main difference is that there are 73 licensed distilleries in the state of Kentucky, and 34 in Virginia. Our water has similar levels of limestone, and if you compare our climates, these too are similar. In Lexington-Fayette, the summers are warm and humid; the winters are short, very cold, and wet; and it is partly cloudy year round. Over the course of the year, the temperature typically varies from 26°F to 85°F and is rarely below 9°F or above 92°F.
In terms of value in the marketplace, there is really no difference. You can review the comparison report we have provided, or conduct your own.
How are market values established?
We don’t control market values, only the quality of the product and the aging. We do however keep a close eye on a variety of market sources, including prices offered by others we respect and the price averages as independently surveyed by ADI and our insurance underwriter. At the current time, our all inclusive price per barrel, is priced more than $200 below young (less than one year) barrels of bourbon based on most recent ADI numbers, and this is not including the more than $1100 per barrel in services that we provide and fees that we cover.
How do I know I can monetize the aged product?
First, the trends as tracked by the Distilled Spirits Council
- As of 2019, Distilled spirits overall have gained share for 9 straight years.
- High end and super premium brands are outperforming their categories.
- American Whiskey continues to outperform the spirits industry
Second, We can help you sell the product as a matured bulk product to our network of buyers for a 10% sales fee.
Third, through our alliance with Victory Spirits Development, we can also put you in touch with experienced professionals who can help you build a brand, find the right route to market and manage the sales and marketing for you.
If I am an investor, can I buy this to hold?
Yes, we are developing a structured investment program that will be detailed soon. If you are a bonafide investor, represent investors, or are a licensed broker-dealer, please click here.
The program as offered, is for the sale of bulk spirits to licensed DSP’s and industry buyers.