Proof is not in the bottle: Maker’s Mark waters down
Maker’s Mark has high demand, says Beam Inc., the bourbon brand’s owner. So high, that they will be lowering the alcohol in the bottle from 45% to 42%, or 84 proof.
Hey, wait–I thought the consumer was the one who was supposed to add the (soda) water! This is clearly some sort of spin on cost-cutting (the tax from the distiller to the TTB comes down with the proof, too). Because, ya know, if it ain’t broke…
I tweeted about it earlier and reactions were uniformly negative. Here’s one: “This is a dumber move than new Coke. Their brand is now toast.”
The official email release pointed to their inability to increase capacity. Why not raise prices? The options seem to be diluting the product, rationing (a mail list or various lot numbers), or raising the prices. The latter would seem to be the classic response to overwhelming demand while diluting seems the least, uh, palatable.
Pappy van Winkle is a cult bourbon, made in limited in Frankfort, Kentucky, where the makers have chosen to ration in the face of high demand. There’s a wait list and people pounce on the few bottles as soon as they hit stores (literally, one guy told me he puts on his running shoes and heads to the store the second he hears the allocation has dropped in NY stores). Restaurants offer pours for $75 a shot, so since the distillery hasn’t raised prices, many of the gains are going bartenders and flippers.
Anyway, I’m not that into bourbon, whisk(e)y or even spirits. But this seems to parallel Big Beer vs craft beer. Big Beer grows through acquisitions, cost-cutting and pushing light beer, which has lower alcohol. Craft beer grows through quality ingredients and…taste! With the rise of smaller distillers across the country, there’s likely a similar effect happening here with the Maker’s Mark “brand.” Shrug. So who’s up for some Pappy?
On February 11th, 2013 at 5:21 pm ,Andrew Beck wrote:
The big difference between craft beer and craft distilling is that craft distilling usually isn’t usually higher quality.
The example you give of Pappy Van Winkle is produced by Buffalo Trace (not exactly a small company).
Since your bourbon isn’t ready for 5 to 20 years after you make it, even if you ramp up the production, you don’t get more bourbon for a long time. Also, because of that long aging process; craft producers have a hard time competing. They either have to take short cuts which hurt quality, or they have to have a huge financial backing to hold back all that product for years with no sales.
On February 11th, 2013 at 9:01 pm ,Dr. Vino wrote:
Andrew – Interesting that distilling is so capital intensive. Or, rather, that brown spirits are capital intensive given the long barrel aging. I guess that’s why companies race out the vodka…
Good to point out that Buffalo Trace (owned by Serzerac) owns Pappy. But even if it is a larger company, it’s still a different solution to the “exploding demand” question than the one that Beam came up with.
On February 11th, 2013 at 9:57 pm ,Thomas Pellechia wrote:
Tyler,
That’s exactly why vodka and gin are on the distillers’ menu–no waiting for the cash they bring.
On February 12th, 2013 at 11:48 am ,Richard wrote:
I bought a bottle of Maker’s Mark yesterday to compare with the the light version. Unless they plan on taking the brand in a very mass market direction (and thus trading on their reputation as a premium brand) it seems like a dumb move. There are too many new interesting premium options out there for brand loyalty to hold much sway.
On February 12th, 2013 at 12:08 pm ,Dr. Vino wrote:
Thomas – clear spirits are clearly cash cows! The sauvignon blancs of spirits in that regard?
Richard – that is a great idea. I’m coming by for the taste test after the new one is out!
On February 12th, 2013 at 12:44 pm ,K wrote:
One thing they’re not mentioning is that this gets them around the liquor control board in neighboring Ohio, where anything over 42 can only be sold through the state liquor store system. Anything 42 and under, however, can be sold in grocery stores and gas stations. So not only are they increasing the amount available for bottling, they’re also getting it on a few more shelves in a pretty big bourbon state.
It’s crap bourbon though, regardless. Eagle Rare (another label under Buffalo Trace) is much better for an everyday whiskey.
For this mixed wine-spirits crowd I can also highly recommend the recent New Yorker article on Islay scotch distilleries, one of which was purchased and resurrected by former wine importer Mark Reynier.
On February 12th, 2013 at 1:38 pm ,Jim Coley wrote:
There’s a reason White Whiskeys have become trendy.
I’d also point out, as Andrew alluded to, that what many people envision as “craft distillers” of Bourbon – I’m thinking of the “Small Batch” stuff you see as well as a lot of custom independent bottlings – really don’t fit the romantic ideal most people have of “craft” bottlings. They are made by a few large distilleries under a wide range of brand names. Often, they are limited in production, but as Andrew notes, aging something for 5 to 20 years requires considerable capital behind the project.
As Thomas notes, most genuinely small distillers are working with vodka, gin, and I would add white whiskey as well. Hangar One is a prime example of a craft distiller making vodka to make ends meet. If these distilleries are successful for a while, then you might see some brown spirits released.
On February 12th, 2013 at 6:13 pm ,Andrew Beck wrote:
If you really like Maker’s Mark, I’d actually suggest any of the Weller bourbons. They’re made by Buffalo trace and are ‘wheated’ just like Maker’s Mark. W.L. Weller Special Reserve and W.L. Weller 12 Year are both the same 90 proof that Maker’s was. My favorite is Old Weller Antique at 107 proof. It’s not surprising that these are similar to Maker’s Mark. Weller was originally produced by Stitzel-Weller. That distillery was owned in part by Julian ‘Pappy’ Van Winkle Sr. Bill Samuels Sr. got help developing his recipe for Maker’s from Julian.
The thing to look for on a bottle of any craft distilled product is for the location it was distilled and/or bottled. If they are different places, you know they were buying their juice from somewhere else. If it was imported (usually from Canada) they have to say so. If it was distilled by the actual ‘craft’ distiller, you can usually figure out more by looking for the words Straight Whiskey. If it doesn’t have the word Straight, but it still says Whiskey you can figure that it didn’t meet the aging requirement (2 years). But to be called Whiskey (unless it’s Corn Whiskey), it had to be aged for some period in charred new oak barrels (the aging can be as little as a minute though). Most likely it was put into micro barrels which gives more wood interaction faster, but doesn’t really replicate the long aging process.
My biggest fear with the Whiskey shortages now is that the distilleries may be ramping up production too high now to deal with demand 10 years from now. If Bourbon popularity goes down, we might end up with a glut and a lot of people going out of business when they have all that extra distilled stuff laying around.
On February 13th, 2013 at 11:51 am ,Dr. Vino wrote:
K – interesting insight about Ohio. Also, great to flag the New Yorker story on Islay for everyone, which touches on the themes of quality and aging as well as corporate ownership. So it’s really relevant to our discussion:
http://www.newyorker.com/reporting/2013/02/11/130211fa_fact_sanneh
Thanks, Jim. Sounds like lots of the “micro brews” owned by Coors, AB, etc.
Andrew – Gauging demand must, indeed be tricky. But in this low-interest-rate environment, the cost of capital tied up in barrels is relatively low, so I could understand a company leaning toward higher production to keep up with higher demand/population growth estimates.
On February 13th, 2013 at 11:52 am ,Dr. Vino wrote:
PS – Julian Van Winkle â€expressed his thoughts on the issue:
@jvanwinkle4
Maker’s 84? This is a great example of how the bean counters can hurt a brand. Bill Samuels,Sr, Pappy, my Dad are spinning in their grave!
https://twitter.com/jvanwinkle4/status/301460577962835968
On February 13th, 2013 at 12:45 pm ,Andrew wrote:
Well the demand thing is tricky. Because prices are going up, and the distilleries aren’t going to want to see them go down. If we end up with a glut, they might actually just destroy the aged distillate instead of selling it in bulk or bottling it. I’m not sure what the tax implications of that are.
On February 14th, 2013 at 10:42 am ,Isabel wrote:
They could have come out with an a “lesser” MM that was watered down or given some other twist, made money on that, raised the price of MM and call it a day, i.e. a VS to their VSOP.
On February 14th, 2013 at 10:56 am ,Andrew Beck wrote:
Isabel,
The problem with that idea is that they already came out with a higher end product (Maker’s 46).
Although I probably would have done something similar to what Wild Turkey did. Make a cheaper 80 proof version, and then raise the prices of both the original and the 46.
On February 14th, 2013 at 11:02 am ,Isabel wrote:
I’m in the trade and in my head I had already done that. They are getting a lot of press out of this. With so many choices out there and sometimes little respect for brand lovers, it’s easy to move on. The brand is relevant, don’t destroy (or tarnish) the brand.
On February 17th, 2013 at 2:51 pm ,Dr. Vino wrote:
Beam has reversed the decision and won’t be diluting the blend.
http://www.usatoday.com/story/news/nation/2013/02/17/makers-mark-restore-proof/1926081/