Whiskey Giant MGP Ingredients Decided To Shut Down This Distillery — Here’s Why

MGP Ingredients is closing its facility; the facility specializes in producing grain neutral spirits (GNS.) (Photo: AP Photo/The Casper Star-Tribune, Alan Rogers)

Whiskey giant MGP Ingredients has made the decision to shut down its facility that produces neutral grain spirits in Atchison, Kansas. In a news release published Thursday, the company cited neutral grain spirits no longer being “economically viable” for the whiskey mega-producer as the reason for the closure, which will go into full effect by January 2024.

“After careful deliberation, we have concluded that the closure of our Atchison distillery is a necessary step to further align the product categories we participate in and their supporting operations, consistent with our long-term strategic objectives,” David Colo, the President and CEO of MGP Ingredients, said in the news release.

Per the release, MGP intends to move forward with its previously announced investment of $16.7 million in an Ingredient Solutions business based out of Atichson. The business is a wheat and pea protein production facility, according to Food Navigator USA.

The massive whiskey producer acquired Luxco for $476 million in April 2021. Luxco is behind popular whiskey brands including Penelope Bourbon, Remus Straight Bourbon, Yellowstone Bourbon and Ezra Brooks.

The decision to phase out the distillery by January 2024 was due to “profitability headwinds” associated with grain-neutral spirits. MGP also cited an increase in the cost of local corn as a reason for the distillery’s closure.

Grain neutral spirits are spirits distilled from a fermented grain mash at or above 190 proof and bottled at nothing less than 80 proof, according to MGP.

These spirits are often considered a “blank canvas” and are used in vodkas and gins as the primary ethanol ingredient, according to GNS production company, EthanolUS.

“We are grateful for the unwavering support and contributions of our distillery employees, customers, suppliers and the people of Atchison. We are committed to ensuring a smooth transition as we wind down operations at the distillery between now and the end of the year, and we look forward to continuing support for the Atchison community,” Colo concluded.

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