Meet the Man Behind the Largest Family Owned and Operated Distilled Spirits Company in America
Photos courtesy Heaven Hill Brands
Heaven Hill Brands is the sixth largest spirits supplier in the US. They’re the second largest holder of aging bourbon whiskey in the world, with an inventory of more than 1.6 million barrels. It’s an empire in its own right, with iconic whiskeys such as Evan Williams and Elijah Craig—and, as of August 2019, Black Velvet Canadian Whisky—as well as a diversified portfolio that runs the gamut of spirits, including vodka, gin, rum, tequila, cognac and a variety of liqueurs. Heaven Hill has been around for 85 years and only continues to ramp up its growth.
But what makes Heaven Hill truly special, especially given its dizzying performance, is that it’s family owned and operated. At its core, Heaven Hill is a small town mom-and-pop kind of place, a utopian destination akin to its namesake. The company has kept this same humble attitude and warm approach throughout its history, and that’s likely been the biggest factor to fuel its success.
“You have to have patience and perseverance,” said Max Shapira, President of Heaven Hill Distillery. “If you’re a publicly held company, I don’t know if you have that luxury to be patient.”
Shapira’s father, Ed, started Heaven Hill in 1935. The business had a rocky journey at times, but patience and perseverance were undoubtedly the mantras that led it to success.
“Our family got into this business almost on a lark,” Shapira began. “Today we say it was like private equity 1935 style, except the person doing all the investing didn’t know how to make the product he was investing in.”
Shapira’s grandparents immigrated to the US from Lithuania in the 1890s. His grandfather began as a peddler in rural Kentucky, “with nothing but a pack on his back.” He eventually opened up a small department store, and established himself as a prominent name within his community. He had five children—including Ed, Max Shapira’s father—and sent each of them to open their own stores around the state when they came of age.
Ed landed in Bardstown, Kentucky, which happened to be a prominent bourbon distillery capital prior to the Prohibition era. And Ed
“By [the time Ed moved to Bardstown], people said the great social experiment of Prohibition wasn’t working. There was crime involved. Bootlegging. Bad whiskey that was killing people,” Shapira said. “People pretty much knew Prohibition was going to be repealed in the early 1930s.”
“As Prohibition was ending, a lot of people wanted to get back into the business that they forcefully exited for Prohibition,” Shapira said. “You had a lot of people with the technical expertise in the [bourbon distilling] business, but needed some investors.”
Ed was that investor. His department store saw great success, ironically fueled by the Great Depression, and he dedicated $14,000—worth nearly $270,000 today—to launching a bourbon distillery. This leap of faith ended up being the first step for Heaven Hill, but the decision still mystifies the family.
“This is one of the most speculative investments you could ever think about,” Shapira said. “There was no distillery, there was no brand. Whatever you made, you had to wait years until the product had the aging characteristics that defined the flavor.”
Ed’s initial business partners backed out of the project after just 18 months, but instead of liquidating the distillery, Ed put in another $25,000—worth nearly $470,000 today—to take complete ownership.
“He hired some very good people. He got a great distiller. Then he waited, and waited,” Shapira said. “It took patience and perseverance until he had a product that people might want to taste.”
That distiller, by the way, was Joseph L. Beam, Jim Beam's first cousin. The Beam family continued to fuel Heaven Hill’s production thereafter. Parker Beam was Heaven Hill’s Master Distiller for 50 years. And with that, Ed’s patience and perseverance bore fruit.
“[Ed] brought out a bottle called Old Heaven Hill Bottled-in-Bond. The ‘Bottled-in-Bond’ part signified good safe keeping, from 1897 when the government passed a bottle and bond whiskey act. That Bottled-in-Bond title was like a government seal of approval. When this bottle went out, the family said ‘we might have something that could be a real business.’”
Old Heaven Hill Bottled-in-Bond became the Heaven Hill empire we know today.
Business was still no cakewalk after the first product launched. Like any startup, growing pains were inevitable, and Heaven Hill was victim to forces beyond its control.
“During World War II, the whole industry closed down to make alcohol for the war effort. That created a gap in inventory when the war was over. Then excess production led to excess supply,” Shapira said.
“In the 1960s, you had the rise of vodka. Consumer taste was changing rapidly. From the mid-60s to the mid-90s, you didn’t have such a great picture for the bourbon side of the distilled spirits business.”
Shapira noted that Heaven Hill made some incredible pivots during this time and, of course, stayed well afloat during this decades-long period. His focus, however, centered around an industry turning point that most people didn't see coming.
“Ultimately, in the middle to late 90s, we started to get our act together a bit. Single barrel products and small batch whiskeys. Expanding the range of different recipes,” Shapira said. “[We were] doing things out of the ordinary. Using different age characteristics that we hoped consumers would be interested in tasting and mixing. That was the foundation for the comeback of the whiskey category.”
Then whiskey started to take off again.
“By 2000 to 2005, this started to look like a different kind of business. Consumers started having different interests,” Shapira said. “By 2008 to 2010, we started seeing the return of the great American whiskey renaissance. And now, we’re right in the middle of it. I’ll bet no analyst would have ever predicted that we would have this kind of new era in the American whiskey business.”
Whiskey and bourbon drinks have indeed resurged in popularity, with a slew of mixologists incorporating their takes on old fashioneds, highballs and the like. But Shapira thinks that the potential is far from tapped, and that distilleries like his continue to have tremendous room to grow.
“With 320 million people in the United States, the amount of American whiskey consumed is still about 65 percent of what was consumed during whiskey’s peak in the 1950s,” Shapira said. “And that was with a significantly smaller population…We’re very bullish on bourbon.”
Shapira grew up in the whiskey business, naturally. He recalled his father bringing home customers, retailers and ‘some real characters’ over for dinner.
“It all looked like so much fun,” Shapira said.
He started working for the family business at age 8, where he sat at the distillery’s guardhouse and controlled the gate for trucks to come in and out. Eventually he went to college, earned his MBA and worked on Wall Street. But Heaven Hill beckoned for him
“I really liked what I did in New York and could have stayed there for a number of years,” Shapira said. “But the allure of this very interesting business called me back.”
He admitted that taking over the distillery wasn’t easy, and he was very thankful for his father allowing him the opportunity to make mistakes and learn from them. The same culture of patience and perseverance persisted, allowing Shapira to take the reigns and command Heaven Hill’s success to this day, with the third generation right
“It’s the ability to lay down whiskeys, age them for a very long time, costing a bit more than they might otherwise. But to ensure you have the right quality, you have to do the right thing,” Shapira said. “It allows us to plan for the future in a very controlled and timely fashion. Understand the consumer’s wants and desires not just today or tomorrow, but years down the road.”
This outlook has fueled Heaven Hill’s strategy toward offering a diverse and dynamic product portfolio. This approach allows the company to hedge its bets and stay nimble to keep up with ever-changing consumer preferences.
“We have everything from 135 proof bourbon whiskeys down to light cordials. Some like higher proof whiskeys. Some want light-tasting, less caloric drinks. We have this broad portfolio appealing to a lot of different tastes,” Shapira said.
Shapira continues to look ahead.
“We’ve got another generation involved in the business. They keep me active,” he said. “They keep looking for new things, setting the long term strategic direction of the company. We’ve really transformed how we’ve gone to market over the last few years.”
Shapira has commanded an era of innovation that’s led to Heaven Hill’s growth, but the ideals of patience and perseverance remain at the core.
“In any kind of brand building, you can’t have a product and think it’s gonna be a great seller in 3 months,” he said. “It’s that long term planning that's so important.”
“There’s always a new style, a new taste, a different experience.”
While Heaven Hill’s volume and variety have certainly grown over the years, its familial touch has remained much the same.
For more info on Heaven Hill’s portfolio of spirits products, visit www.heavenhill.com.