http://www.chow.com/stories/11104
"Liquid smoke adds smoky barbecue flavor to unbarbecued food. It’s not just a clever name: It’s made from water that has captured the flavor of smoke.
Wright’s Hickory Seasoning is made by collecting the smoke from burning hickory wood in a condenser and cooling it until it forms water, says Marge Broncaccio, a B&G Foods representative. The droplets are captured and filtered twice, before being bottled without any additional ingredients.
Colgin makes its liquid smoke in much the same way initially, but then ages it in oak barrels to mellow the flavors before adding vinegar, molasses, and caramel color.
The Lazy Kettle brand of liquid smoke is made differently. Hickory and a little mesquite are burned at a low temperature, then the smoke is captured and diverted into a tunnel, says Lawrence Ames, president of Honest Foods. In the tunnel, a constant stream of distilled water is channeled through the smoke to pick up the flavor. The liquid is then filtered to remove any sediment or oil before bottling. There are no additional ingredients.
Because the flavor of liquid smoke is so concentrated, Ames cautions against using too much: “A little is great; a lot is terrible.” If you’re going to use it, Chowhounds suggest adding some to a spray bottle of water to control the application. If you don’t want to use liquid smoke in a recipe, the hounds also offer some good suggestions for alternatives, which include chipotle chiles, smoked paprika, and Lapsang Souchong tea."