Friday, August 23, 2019

When 'All' Doesn't Actually Mean 'All'



It's right there on their home page, in the upper left-hand corner: "Kentucky Distillers' Association (Est. 1880). Responsible for Promoting and Protecting All Things Bourbon."

That's what is known as a 'mission statement.' By their nature, mission statements are aspirational. Use of the word 'responsible' conveys a sense of duty.

But that's not the word causing a problem with this noble sentiment. It's the word 'all.' The Kentucky Distillers' Association (KDA) has no interest in "promoting and protecting all things bourbon." The KDA is only interested in promoting and protecting those 'bourbon things' that flow from it and its member companies.

About 70 percent of all the bourbon made is made by four companies. One of those companies, Sazerac, resigned from the KDA ten years ago. The reasons were many. In the end, Sazerac looked at the cost of membership and decided it could spend that money better by itself. A decade on, they seem to have been right.

Sazerac operates two bourbon distilleries in Kentucky, Buffalo Trace in Frankfort and Barton 1792 in Bardstown, both of which do heavy tourism business. It has a small maturation facility and massive bottling plant in Owensboro. Although the corporation is based in Louisiana, it is run from Kentucky. It is big and getting bigger. Buffalo Trace alone is in the midst of a $1.2 billion expansion. It already owns the largest still in bourbondom, at 84 inches, and plans to add another one the same size.

Not long after Sazerac left the KDA, the KDA sued to stop Sazerac from using the term 'Kentucky Bourbon Trail,' which the KDA had trademarked. As far as the Kentucky Bourbon Trail is concerned, Sazerac's distilleries don't exist. Despite that, Sazerac's distilleries consistently add visitors at a higher rate than the rest of the state.

It's not just Sazerac that is excluded from KDA's 'all.' It has expressed its displeasure with other 'things bourbon' that it does not control, such as Louisville's annual Bourbon Classic. It has gotten in the way of regional tourism authorities that want to promote their bourbon assets (KDA members or not). It even tried to trademark the words 'Drink Kentucky Bourbon,' so no one could use them without KDA's permission. (That failed.)

I have been persona non grata with KDA since I criticized its Bourbon Affair about five years ago.

The KDA does a lot of good, but the KDA is a membership organization and it operates solely to advance the interests of its members. Nothing wrong with that, it's what you expect any club to do, but claiming to 'promote and protect all things bourbon' is hubris at best, hypocrisy at worst.

Wednesday, August 14, 2019

What Would Owsley Think?



I saw this in Walgreens the other day. Maybe not this brand, but this fragrance. Whiskey & Tobacco. At first blush, that doesn't seem like a good choice for a scented candle. I certainly have been in many rooms redolent with the scents of actual whiskey and tobacco. I can't say it was edifying.

I think I would be more disposed to burn a scented candle to mask, rather than reproduce, the aroma of whiskey and tobacco.

But maybe I'm looking at this the wrong way. I'm reminded of an interview I did with Owsley Brown, president of Brown-Forman, makers of Jack Daniel's, Old Forester, Early Times, Woodford Reserve, and many other whiskeys. Owsley Brown was the great-grandson of Brown-Forman founder George Garvin Brown. He spent 37 years working for the company, but he told me about his memories of visiting the distillery as a child.

Today, the corporate campus in Louisville, on Dixie Highway just south of West Broadway, houses only offices and bottling. Distillation and maturation happen elsewhere. In Owsley Brown's youth (he was born in 1942), everything was done at Dixie Highway, and Brown-Forman's plant was right next door to a huge Philip-Morris cigarette factory.


Mr. Brown told me he enjoyed his childhood visits to the distillery. He described them as "magical." He recalled the musical cacophony of the bottling line, and how the women who worked there always made a fuss over him. (Bottling line staff in those days were mostly women.) And he remembered the smell, the aroma of the whiskey mingling with the tobacco scents from next door.

Since Owsley Brown died in 2011, we can't ask him if this candle brings back any happy childhood memories, or if it is more in tune with my decadent adult pursuits. I guess we'll never know.

Thursday, July 18, 2019

The Perils of Personality Brands



This column is not about the latest iteration of the Bulleit family tragedy, which has been ignited again by an article today in Neat Pour, in which Hollis Worth (née Bulleit) gives her first interview. Diageo, which owns Bulleit Bourbon and Rye, declined to comment for the article, as did Ms. Worth's father, Tom Bulleit.

All cards on the table, I know Tom Bulleit professionally. I have never met Hollis Worth. I haven't spoken to Tom in several years and we've never talked about his family.

My purpose in writing today is to look at another aspect of this, separate from the story itself, which is the risk any company takes when it ties a product or brand so closely to a living human being.

The most extreme example is Jared Fogle, principal spokesperson for the Subway sandwich chain from 2000 to 2015, when he was charged and convicted of sexual offenses against minors. Did Subway lose any business as a result? The company has struggled ever since Fogle's misdeeds became public. Starting in 2016, Subway has closed more stores each year than it has opened, for the first time in its history.

They can't blame all that on Fogle. Fast food is a brutal business and Subway's success spawned a flood of imitators.

Every situation is different. Fogle was never presented as anything other than a spokesperson. Mila Kunis has been the spokesperson for Jim Beam since 2014, a significant run, but if she got into some embarrassing trouble it's hard to imagine how the brand could be significantly damaged. Matthew McConaughey has been hawking Wild Turkey for about the same amount of time, and it's the same deal there. Both brands have their master distillers and other personalities. The risk is spread around.

A slightly different case might be made for newly-launched celebrity brands, such as Ryan Reynolds with Aviation Gin, Bryan Cranston with Dos Hombres Mezcal, or Bob Dylan with Heaven's Gate Whiskey. The only possible reason for a consumer to be interested in those brands is their interest in the celebrity owner. The celebrity is the brand.

In Diageo's case, the cautionary tale with Bulleit is be careful what you create out of thin air. Tom Bulleit is a real, living person and he really did create a bourbon brand named after himself. Hollis Worth is his daughter, also real and alive. That is about where the reality ends.

The Bulleit brand launched in 1995, via Buffalo Trace. That was a contract distilling arrangement, Tom Bulleit owned the brand. A few years later he sold it to Seagram's. They created the current bottle and brand story, including the legend of Tom Bulleit's ancestor, Augustus. Seagram's folded and the brand passed to Diageo in 1999-2000.

I've written about Bulleit many times over the years, starting with this one in 2008. Go here for more about the Augustus Bulleit origin story. Go here for a succinct summary of the actual Bulleit origin story.

In a very real sense, Diageo is hoist on its own petard, as they have gone to great lengths over 20-25 years to make Bulleit look like a family company, even though it's not. They took a name they liked because it was a homophone for 'bullet' and built an entirely fictional origin story around it involving currently living persons (and one dead one). They hired two of the living persons to front the brand throughout the industry, cast as founder and heir respectively. They overplayed the roles of those persons in the creation, making and marketing of the brand. As a result, Hollis Worth is very well known among bartenders, bar owners, and cocktail writers; and Tom Bulleit is very well known among distributors, retailers, and whiskey writers. They personify the brand.

You can do whatever you want with a dead or fictional person, but living people have real lives that can go awry and reflect negatively on the businesses with which they are associated, whether it's Elon Musk or Jeff Bezos. It's something else again when you cast living people in fictional roles. The actual connection between the people and the brand is minimal, but the fictional connection is real enough to hurt you when something goes wrong.

Inevitably, the Bulleit family conflict is a problem for Diageo. How big a problem it is, and what Diageo will try to do about it, remains to be seen.

Friday, July 5, 2019

You Cannot Age Gin (Wink Wink)



Gin, the original flavored vodka, is having a moment. Gin, especially craft gin, has captured its own artisanal cachet. Except for juniper berries, which are what makes gin gin, the sky is the limit in terms of flavorings.

An important sub-category these days is aged gin, although when the subject comes up you're liable to hear someone mention that aged gin is not allowed under Federal government rules. They may even cite Section 5.40 (d), which says, "Age, maturity, or similar statements or representations as to...gin...are misleading and are prohibited from being stated on any label."

In practice, that is less restrictive than it sounds. It works like this. You can age gin. You just can't SAY you age gin, as in you can't call it 'aged gin,' and you can't say how long it wasn't aged. (How does Corsair get away with its label? You'll have to ask them.)

You can even describe your 'barrel mellowing process' in the "general inconspicuous" label copy. And, of course, your product can exhibit the obvious tawny color extracted from wood.

For the most part, TTB rules don't tell producers what they can and cannot make, they just regulate what they can say about it.

Thursday, June 27, 2019

When Buffalo Trace First Made Wheated Bourbon



When Sazerac released the current Weller packaging, about three years ago, it introduced a new claim for the brand, "The Original Wheated Bourbon."

We debunked that claim then and won't repeat it here, but that raised another question. When did the Buffalo Trace Distillery (BTD), where Weller is now made, start to distill wheated bourbon?

The answer comes from Sazerac President Mark Brown himself, in a letter written to me in 2003, in response to a question about a 12-year-old Old Charter expression they had just released.

"When we acquired Weller and Charter, we purchased enough stock to cover our selling needs until our own distillations come of age. So, the Charter whiskey being used all came from the Bernheim inventory.

"However, there is an interesting twist to the story ...

"We actually distilled some Weller and Charter for UD in the late 80's / early 90's and have been aging them at the Trace since then. In the case of Charter 12, it is actually the whiskey we distilled and aged. In addition, given that Schenley owned both BTD and Bernheim at the same time, there was / is a lot shared knowledge and expertise between the two distilleries, hence our ability to distill Charter competently. In the case of Weller, we had quite a bit of practice when distilling for UD."

Schenley, which became part of the Diageo roll-up in 1987, owned both Buffalo Trace and Bernheim until 1983, when it sold Buffalo Trace to Ferkie Falk and Robert Baranaskas.

Although they also bought the Ancient Age brand, their main business was contract distilling. As those were some of the darkest days for the industry, many distilleries had closed or were operating on very reduced schedules. United Distillers (UD, predecessor to Diageo) owned both Stitzel-Weller, where Weller was made, and Bernheim, where Charter was made, but both distilleries were dark for long stretches during that period. When they were, and UD's projections showed they needed some new make, they would contract it to Buffalo Trace.

In 1992, Sazerac bought Buffalo Trace. That same year, UD opened New Bernheim, closed Stitzel-Weller and Medley, and stopped needing Buffalo Trace's contract distilling services.

Buffalo Trace, like everybody else, also had plenty of room in its warehouses when it was contract distilling for UD. It didn't make sense to ship the barrels of new make over to Louisville to be stored there so they stayed in Frankfort. UD/Diageo owned the whiskey and would claim some of it from time to time, but some of it was still there and was included in the stock Sazerac bought when it bought the brands in 1999.

After Prohibition, only one distillery made a point of making wheated bourbon and that was Stitzel-Weller. The recipe they used probably came from the Stitzel family, but no one knows for sure. Wheat had always been an occasional ingredient in bourbon in the pre-Prohibition era but no one made a point of touting a wheated recipe, or a rye bourbon recipe either, for that matter. Nobody talked about wheated bourbon until Pappy Van Winkle did post-Prohibition.

Wednesday, June 26, 2019

A Bourbon Drinker's Guide to Flavored Bourbon


No, really. We're taking this seriously.
A couple months back, we looked at the wave of flavored bourbons from a regulatory perspective, but we didn't look at it from a consumer perspective. Consumers clearly like the stuff. Last year, according to Shanken News Daily, the total flavored whiskey segment in the U.S. grew by 5.5 percent to 12.28 million cases. A decade ago it was something like 2 million. Growth has slowed but since the flavoring possibilities are endless, there will always be news in the segment and new products attract new customers. Is there a limit? Well, flavored vodka shows you the answer to that.

Sazerac's Fireball is still the leader and still growing, up 6 percent in 2018. Its market share is about 40 percent. The whiskey in Fireball is Canadian, as is number 2, Crown Royal Apple. Crown Royal Vanilla is number 6. The rest of the top 10 is American, led by Jack Daniel's Tennessee Honey.

'Flavored,' as the word is used these days, covers a multitude of sins, everything from secondary barrel finishes to liqueurs in which bourbon is merely an ingredient.

At least that's my definition of 'flavored.' Shanken doesn't see it that way. They don't count barrel finishes as flavored, so products such as Angel's Envy, Maker's 46, Legent and other finished products aren't included in their 'flavored' analysis.

What's good in the segment depends on what you want. If you want bourbon with just a little something extra, you probably can't do better than Angel's Envy, which is straight bourbon flavored though a secondary aging in port barrels. Maker's 46, the various Maker's Private Select expressions, Beam Suntory's Legent, Woodford's Double Oaked, and several iterations of Luxco's Blood Oath series also handle flavoring through barrel finishing in a subtle and sophisticated way. They couldn't be further from Fireball.

Next we get to the products that contain flavoring but no alcohol other than whiskey. Jim Beam's Red Stag is an example of this. (Apparently, this is no longer true. See comments below.) This is as distinguished from the products that are either straight-up liqueurs (Wild Turkey American Honey) or a mixture of whiskey and a liqueur (most of the rest, including Fireball, Jack Daniel's Tennessee Honey, Evan Williams Honey, etc.).

A liqueur is an distilled spirit beverage but the alcohol is almost always neutral spirit, i.e., vodka. It's hard to determine the exact contents of these products, but it seems likely that in most if not all cases, if there is a liqueur involved, most of the alcohol in the product is vodka, not whiskey.

The most favorable way to think about a flavored bourbon is as analogous to a bourbon cocktail. It's not bourbon, it's a drink in which bourbon is an ingredient. As with cocktails, some are more sophisticated than others. Unlike cocktails, the best of which offer you a unique combination of flavors, most flavored whiskeys keep it simple, emphasizing just one flavor; honey, cinnamon, cherry, peach, apple, maple. And, of course, they usually contain a lot of sweetner.

If you want to avoid neutral spirit, avoid anything that has the word 'liqueur' on the label. The Beam flavored products seem to be your best bet for that. Something like their Knob Creek Smoked Maple comes to mind, or the original cherry-flavored Red Stag.

An interesting side note. Shanken considers Southern Comfort to be a flavored whiskey. For most of its history, SoCo was a liqueur, with 100 percent of its alcohol coming from neutral spirit. It contained no whiskey. For a brief time under Brown-Forman, it was about 5 percent whiskey. Sazerac, which bought the brand in 2015, has repositioned it as "the smooth-drinking whiskey created by M.W. Heron in 1874 and born in New Orleans." They can call it whiskey because it is now "Spirit Whiskey with Natural Flavors." Spirit whiskey is a type of blended whiskey that is 5 percent whiskey, 95 percent vodka. Go here for more about spirit whiskey.

Friday, June 21, 2019

Last Chance to Comment on Proposed TTB Rule Changes



Next Wednesday, June 26, is the last day to comment on TTB's plan to "comprehensively amend its regulations governing the labeling and advertising of alcohol beverages in order to improve understanding of the regulatory requirements and to make compliance easier and less burdensome for industry members," which was first published seven months ago. (TTB Notice No. 176)

Today the Texas Whiskey Association (TXWA), a group of 15 Texas-based distilleries, released its comments. They did a good job. Rules drafting is hard work. If you are interested in this sort of thing, you should take a look at what they did. Jared Himstedt, who signed the letter as TXWA Founding President, is Master Distiller at Balcones. A list of the TXWA members is here.

I agree with most of their comments, and where I don't I can see their point. Mostly, I have a different perspective on it.

For the section "Statements of Age 5.74 (a) (3)," TTB proposes that where spirits are aged in more than one barrel, only time spent in the first barrel can be stated on the label. Similarly, for the section "Statements of Age 5.74 (e)," age statements of any kind would be prohibited on barrel-finished products.

In both cases, TXWA argues for more flexibility for its members. They want to be able to state the additional time as well as the original time. It's a good transparency argument, plus whiskey nerds love that sort of thing. The more truthful information a producer can provide, the better.

However, I disagree with TXWA and support TTB's original proposal. This rule regulates the age statement, which is required under some circumstances, optional in others. The age statement is a formal part of the label and meant to be presented in a standard form. For the sake of the ordinary consumer, label disclosures need to be simple and unambiguous.

Furthermore, the proposed rule regulates only the formal age statement, not every single word of label copy. Current TTB rules allow "general inconspicuous age, maturity or similar representations without the label bearing an age statement." That means producers may describe their process and provide all of that additional information in an "inconspicuous representation," i.e., back label copy, they just can't incorporate it into the formal age statement.

We went through this last year with Wild Turkey.

I also disagree with TXWA on the matter of "Whisky Class Designation 5.141 (b) (3)," which states "that spirits should be labeled with their most appropriate class type. If it meets the definition of a ‘Bourbon Whiskey’, it must be labeled as a Bourbon Whiskey and not as a specialty whiskey or a ‘Whiskey’."

This has come up before and it always strikes me as little more than an underhanded dig at Jack Daniel's. If a product qualifies as whiskey and the producer wants to call it just whiskey, but they arguably could call it bourbon whiskey, how is the consumer harmed by the producer choosing to not call it that?