Thursday, July 30, 2009

Stranahan’s Names National Distributor.

In a significant development for the fledgling micro-distillery movement, Stranahan’s Colorado Whiskey has appointed a national distributor, Republic National Distributing Company (RNDC), effective August 1.

RNDC is the second largest distributor of premium wine and spirits in the United States, with operations in nineteen states. Partnering with RNDC to handle distribution in these territories will enable Stranahan’s to refocus its efforts on increasing production of its straight Rocky Mountain whiskey.

Stranahan’s recently moved to a larger facility and increased production from six to eighteen barrels per week.

Stranahan's showed that it deserved attention from a legitimate powerhouse distributor by achieving distribution in 35 states and four foreign counties on its own.

RNDC operates in Arizona, Alabama, Colorado, District of Columbia, Florida, Kentucky, Louisiana, Maryland, Mississippi, Nebraska, North Carolina, North Dakota, Ohio, Oklahoma, South Carolina, South Dakota, Texas, Virginia, and West Virginia.

Stranahan’s Colorado Whiskey retails for about $55 a bottle.

Richard Paterson Teaches Us a Trick.

Richard Paterson is Master Blender at Whyte & Mackay, makers of The Dalmore Single Highland Malt Scotch Whisky.

I had lunch with Paterson yesterday, along with his PR handlers and several other journalists. We ate, drank scotch, and listened to Paterson’s presentation about the company’s flagship single malt brand, The Dalmore, which has new owners, a new U.S. importer, and is being re-launched.

Paterson is one of Scotland’s best-known noses, but the highlight of his presentation yesterday was a parlor trick.

That may sound snide. I don’t mean it to. I’ve seen a million of these presentations, they’re all about the same, and this was a particularly good parlor trick executed by a master showman.

Paterson took a water glass that was about two-thirds full of plain water. Then he took a clean, white handkerchief, unfolded it, and draped it over the glass. Using his finger he made a well in the center and slowly poured in a few ounces of whiskey. Then he carefully removed the handkerchief and, voila, the whiskey was floating on top of the water, with a distinct line between them.

He even rocked the glass back and forth a few times, and the whiskey and water didn’t mix.

The trick isn’t hard to do, Paterson explained. The key is to make sure the handkerchief touches the water when you create the well and remains in contact with it as you carefully pour in the whiskey.

Oh yeah, The Dalmore. It’s good stuff. The familiar 12-year-old expression is still the flagship. It is an affordable and not-too-challenging entry into the world of premium single malts. But the new regime (The Dalmore used to be a Beam product) has broadened the line to include additional 15-, 30-, 40- and 50-year-old expressions (pricey), plus two NAS labels, called Gran Reserva and King Alexander III.

You can find out more about them here.

Is the Farnsworth House a Commie Plot?

If you live long enough (I'm 58), very little sounds new to you.

Much of the right's rhetoric today reminds me of the fifties and sixties, when 'liberal' was just a polite way to say 'communist.' One big difference then was that the right regarded both major parties as dominated by out-of-touch eastern elitists. It would be hard for any conservative to maintain that today, considering conservative dominance of the Republican Party.

As some of you may know, I am a volunteer tour guide at the Farnsworth House here in the Chicago area. Even before it was built, some people hated the Farnsworth House, and not just on aesthetic grounds.

They considered it and all of modern architecture and design subversive. In short, communist. They believed the design dictum "less is more" was a communist plot to condition people to accept the lowest common denominator leveling that was inevitable in a forced egalitarian society.

One of the harshest critics was Elizabeth Gordon, the editor of House Beautiful. In 1953, she edited a forward-looking issue of the magazine that included an essay, "The Threat to the Next America," in which she explained her theories about the subversive agenda of modernism advocates.

Some quotes:

"They are trying to convince you that you can appreciate beauty only if you suffer – because they say beauty and comfort are incompatible."

"They are a self-chosen elite who are trying to tell us what we should like and how we should live."

"For if we can be sold on accepting dictators in matters of taste and how our homes are to be ordered, our minds are certainly well prepared to accept dictators in other departments of life."

"Break people’s confidence in reason and their own common sense and they are on the way to attaching themselves to a leader, a mass movement, or any sort of authority beyond themselves."

This is why Sarah Palin resonates so powerfully with many, because she is talking about an American way of life she feels is being undermined by domestic elitists (Hollywood, the media) and non-American 'others' (mostly the French). To Elizabeth Gordon, it was closet space. To Sarah Palin, it's shooting your own food.

Tuesday, July 28, 2009

Reforming Illinois Politics: Where To Begin?

An essential element of any corrupt enterprise is that participants in it cannot trust each other until all of them have been compromised. All of them. That is fundamental.

Since our city government, state government and premier state university have all been shown to be corrupt enterprises, we should assume that all of the participants, at least all who were or should have been aware of the corrupt practices, are compromised. If anyone is serious about reforming any of these institutions, the crucial first step is to consider all current participants culpable. Until they are removed and replaced—all of them—reform will be illusory.

The recently-adopted ethics reforms you are hearing about are cynical frauds touted by cynical frauds.

Pat Quinn may be the qualified exception. He is shaping up as the last honest politician in Illinois, at least on the Democratic side. (Republicans aren’t excluded because they’re more honest, but because they scarcely matter. That might change.)

The best evidence that Quinn is honest is the way the rest of them are going after him. Part of their strategy is to paint him as dishonest. In psychology, that’s called ‘projection.’ They also say he stood by while Blagojevich made a hash of things. What exactly did comptroller and presumed Quinn primary opponent Dan Hynes, also a constitutional officer, do that Quinn did not to check the governor?

Is that the best argument they have? For that matter, is Hynes the best candidate they have? Does nominating a hereditary politician really say, “we get it about business as usual?” Of course it doesn’t, because they don’t.

Last week, House Speaker Michael Madigan, Senate President John Cullerton and House Republican Leader Tom Cross all declined to testify before Quinn’s Illinois Admissions Review Commission, which is investigating the corrupt practices at U of I. Madigan’s spokesperson said the Speaker “has little to contribute to the probe” because “he was only responding to constituent requests.” Some elaboration on that right there would surely interest the Mikva Commmission.

By snubbing the commission, they’re telling Quinn he has no juice.

Whatever else Lawrence Eppley may have done, he did the right thing today by resigning and calling out both his fellow trustees and top university officials. He might just as well have mentioned every legislator who ever put in a good word for an applicant. It is a corrupt system and they are all part of it.

Eppley testified to the Mikva Commission that he wasn’t Blagojevich's go-between, even though he forwarded admissions requests from the governor's office. According to the Chicago Tribune, which has been vilified for reporting the U of I clout story, Eppley told the commission he didn't expect that passing along student names would give applicants special treatment.

Presumably, he said this with a straight face.

The 48th Ward Democrats Summer Picnic is Thursday, August 6, from 6 PM to 8 PM, at 4921 N. Marine Dr. near the Margate Park field house. New County Commissioner Bridget Gainer will be there, so will Congresswoman Jan Schakowsky. It is being hosted by Alderman Mary Ann Smith, State Representative Harry Osterman, State Senator Heather Steans, and the aforementioned Gainer and Schakowsky. The invitation came from Steans’ predecessor, current 48th Ward Committeeman Carol Ronen, whose eight weeks in the Blagojevich administration got her a $38,000 pension bump. (That whole sordid tale is here.)

So, yes, it is all of them.

Friday, July 24, 2009

The Wrong Way to Promote a Bar.

About 25 years ago, before most of the patrons of Uncle Fatty’s Rum Resort (2833 N. Sheffield Ave., Chicago) were born, activists such as Mothers Against Drunk Driving (MADD) began to raise awareness about the innocent victims of alcohol abuse. Laws were changed to stiffen penalties and improve enforcement. Minds were changed too. Fear of arrest and loss of their driver’s license was the sole motivation for some, but others had their consciousness raised.

Today, some of the activists have gone too far, veering into neo-Prohibitionism, but much of what they did was long overdue and beneficial. The problem hasn’t gone away, but attitudes now are much different than they were back then.

Among those who changed were the purveyors of alcoholic beverages. Some of it was forced on them, but not all. Many common promotion practices were toned down voluntarily.

The new paradigm was to promote in ways that did not encourage over-consumption of alcohol. Rather than promoting Happy Hour with two-for-one drinks, it was promoted with free nachos. Promote fun, not alcohol, the thinking went, and recognize that people rarely need their arms twisted to drink.

What’s more, whenever alcohol purveyors (whether they be producers or retailers) compete on the basis of who can put the most alcohol into the greatest number of people for the lowest price, everybody loses. (e.g., nickel beer night.)

The distinction can be subtle, but there are ways to give consumers an incentive to spend money on your product or at your place without encouraging them to drink too much.

Even outside the world of alcohol, promotions that seem to urge consumers to engage in unhealthy activities have become unfashionable. “All you can eat” fish fries are now “all you care to eat.” The problem, people realized, wasn’t the fixed-price nature of the offer, it was the implied challenge, the dare. “All you can eat” is interpreted by too many people as “how much can you eat, anyway?” They rationalize that the only way to “get their money’s worth” is to stuff themselves sick.

Alcohol, of course, ups the ante.

So I was surprised to read about Uncle Fatty’s “World’s Largest Indoor Bar Crawl,” from 6 PM to 9 PM on Saturday, August 1, “featuring five separate bars each serving specialty drinks in a combined space that spans 8,000 square-feet. The cost is $30 per person for the three hour all-you-can drink package.”

There are those dreaded words, in the bar’s official press release, “all-you-can drink.” (There seems to be a hyphen missing, but that’s the least of it.)

I’m sure Uncle Fatty’s will say they do not encourage overconsumption, so why use that loaded phrase? It just seems to be asking for trouble.

Then there’s this: “All of ‘The World’s Largest Indoor Bar Crawl’ participants will be given a punch card. If they successfully get a drink from each of the five bars, they will receive a FREE ‘Cooler Service’ -- 12 domestic beers served in an iced-down cooler -- on their next visit.”

‘Cooler Service’ is a clever, downscale variation on the ‘bottle service’ offered by high end night clubs, which has been criticized because it makes it harder to monitor each patron’s consumption, which establishments that serve alcohol are legally required to do.

The simplest statement of an alcohol seller’s legal obligation is, “don’t sell alcohol to someone who is drunk.” If you do, the penalties can be severe. Bartenders, servers, even liquor store cashiers, receive special training to make sure they understand this law and their obligations under it.

Nothing about Uncle Fatty’s “World’s Largest Indoor Bar Crawl” appears to be illegal, just the opposite. It crosses a line regarding what is ultimately enlightened self-interest. Make the patrons collect a trinket from the bartender at each bar, and give them a T-shirt instead of more beer. “Drinks included” says what you need to say without the provocation of “all-you-can-drink.” Make it about saving money and having fun. There is no danger that anyone will forget there is alcohol available.

Sunday, July 19, 2009

I see a space shuttle launch in person.

I was in Orlando last week on business. On Wednesday, after we finished working, our cameraman, Dan, asked if he could borrow the rental car to drive over to the coast and watch the shuttle launch. The boss said yes and I decided to ride along.

We didn’t know what to expect, except that we had been checking during the day to make sure it was still go. We were only about 45 miles away. We had a GPS so we just set it for Kennedy Space Center and went. We figured the closer we got the more likely we’d be able to see something. They say you can see it from Tampa when it’s clear, but it wasn’t that clear. A little hazy.

Part of the fun of it was the group experience. When we got to the entrance of Kennedy Space Center (the tourist part), everyone was pulling off and parking by the side of the road so we did too. It was probably 15 minutes to lift-off at that point. We followed the crowd and stopped where the security people wouldn’t let us go further. We were on the left side of the road, which is just open land. The Space Center is on the right side. There were lots of people there, too, inside a fence, and security wasn't letting anyone else in.

Naturally, Dan took the camera and tripod, a professional-grade HD DV camera at that. He’s freelance and it’s his camera, so no clients were harmed.

We were on the mainland side of the causeway that leads to the cape itself, so although we were about 12 miles away from the launch pad, most of it was open water.

Dan also had a small AM radio and was listening to a local station that was covering the launch. As we stood and waited in the 90+ degree heat (no shade available), we chatted with our neighbors. Some do this every time there’s a launch. Others were like us, doing it on the spur of the moment. We were told that the people allowed to cross the causeway, which gets you within six miles, get there in the morning and stay all day. There was a very elderly man next to me, with his family. They brought a chair for him, but he stood up when it got close.

Because Dan had the radio, we were doing the countdown for the people around us, but when we thought there were 30 seconds left, a voice came on the radio to mention that the NASA feed was delayed by 30 seconds, and in fact the shuttle had just launched. Sure enough, the crowd screamed. Our view was slightly blocked by a distant palm tree, so we didn’t see it until about two beats later. The most striking thing was how bright it is. We could barely see the vessel, mostly just this very bright flame, followed by gigantic clouds of smoke.

As soon as we saw it, the elderly man next to me started saying, under his breath, “wait for the sound wave, wait for the sound wave.” It took maybe 20 seconds until we heard anything, then this roar started very softly and grew. It was loud but not explode-in-your-chest loud, as I guess it is when you’re closer.

We saw it for about a minute, maybe, before it disappeared into the clouds, and the sound faded out as well. Everybody turned around and went back to their cars. Show's over.

Traffic was heavy going back, as the group we were in was soon joined by traffic from the causeway. We drove through a very severe thunderstorm, just to add to the Florida experience. All in all it worked out great, since we spent most of the time in the air conditioned car and probably no more than 20 minutes out in the sun. We basically drove there, saw it, and drove back, but it was totally worth it.

And on the anniversary of the moon landing no less.

Saturday, July 18, 2009

The American Whiskey Country Tour.

There is still plenty of time to plan and make a trip to America’s whiskey country yet this year. Just be aware that many distilleries shut down for a few weeks during the hottest part of summer, so call ahead or check their web sites so you aren’t disappointed.

There are now or will soon be 17 different production facilities in Kentucky and Tennessee that welcome visitors. Six are in the Frankfort-Lexington area and five are near Bardstown. Most are major operations owned by giant corporations, but a few are tiny and independent. Most are in Kentucky but three are in Tennessee, including the most popular.

The most-visited American whiskey site is easily the Jack Daniel’s Distillery in Lynchburg, Tennessee. Nearby are George Dickel and Prichards’, a micro-distillery that primarily makes rum.

Two of the remaining micro-distilleries in this collection are in Lexington, Kentucky. They are Alltech’s Lexington Brewing and Distilling Company and Barrel House Distilling Company. Although their brewery and distillery operation is very small, Alltech is a big international company based in Lexington. Barrel House is genuinely small, but it makes vodka, not whiskey (yet).

In nearby Lawrenceburg you will find Four Roses and Wild Turkey. In nearby Versailles; Woodford Reserve. In nearby Frankfort it is Buffalo Trace.

Bardstown is about an hour’s drive from the Lexington-Frankfort area. There you will find Tom Moore, Maker’s Mark, Jim Beam, Heaven Hill and another Four Roses site, where they age and bottle their whiskey. (Lawrenceburg is the distillery only.)

Heaven Hill in Bardstown is everything except the distillery and they have a museum-quality visitors center. Tom Moore, Maker's Mark and Jim Beam are all complete grain-to-bottle operations.

Louisville’s only production facility that gives tours doesn’t make whiskey, it makes barrels. The Brown-Forman Cooperage makes casks for aging Jack Daniel’s, Woodford Reserve, Old Forester, and other Brown-Forman products.

The two remaining attractions are one-offs, not close to any other. One is our last micro-distillery, Corsair Artisan in Bowling Green. The other is CMDK in Owensboro, the old Medley Distillery being revived by Angostura Limited. It is not open to the public yet but will be as soon as it starts distilling again, probably sometime in 2010.

There are other places of interest not associated with production, such as the Oscar Getz Museum of Whiskey History in Bardstown. The entire region is packed with frontier and Civil War history, and Kentucky has many Lincoln sites.

Correction: The original version of this post identified one of the Lexington micro-distilleries as Old Tarr. The distillery's correct name is Barrel House Distilling Company. Old Tarr Distillery is a nearby art and music venue. Both are in the Lexington Distillery District. We regret any inconvenience. (Thanks, Ed.)

Friday, July 10, 2009

Thoughts on the Proposed Revival of James E. Pepper Bourbon.

Yesterday, a post appeared in the discussion forum at StraightBourbon.com. The poster announced that he is "working on a project to relaunch the old James E. Pepper brand and wanted to see if anybody had some thoughts on a good distillery to partner with."

James E. Pepper was the son of Oscar Pepper and grandson of Elijah Pepper. James started his company in 1879, in Lexington. The family was out of it after James died in 1906, but the James E. Pepper brand returned after Prohibition and was sold until about 1960. United Distillers (now Diageo) relaunched James E. Pepper bourbon into Eastern Europe in 1994, primarily into the Czech Republic, where it apparently had been popular before WWII.

Because I receive similar inquiries from time to time, I thought the readers of this space might find my reply to this one useful. Here it is:

You probably know that bourbon whiskey is very dear right now and very hard to obtain for a project such as yours. Non-distiller producers have been struggling for several years now and many who depended on the spot market have gone out of business.

If by "partner" you mean something more than "supplier," the odds get even longer.

Your best bet might be to establish a relationship with CMDK in Owensboro. Perhaps if Angostura got a few contracts they would see their way clear to accelerate the return of that distillery to production. Properly financed and motivated, they could probably start producing in six months or less.

Especially if you want to use a historic recipe, you need to work with someone who wants to be that kind of producer.

Your other best bet may be to spread the word among all the producers of how much you will pay to anyone who will sell you the whiskey you need. Distilleries are constantly making adjustments and in the current financial environment, some of the producers may need to unload some inventory in the short term, even as they increase production overall.

The thing is, warehouse space is at a premium right now too. You will have a better chance of obtaining some suitable whiskey if you are prepared to accept delivery of it immediately. To do that you will need, at minimum, a warehouse and the necessary federal and state licenses.

Another part of the problem is that no current producer has a real connection to Pepper, the way Buffalo Trace has to Old Taylor, for example. The closest would be Brown-Forman, since the Pepper family originally established the distillery now known as Woodford Reserve, but the connection is tenuous for James. Plus BF is probably the company least likely to be interested in a partnership. It's just not their style.

I'm not sure what sort of information you thought this group could give you. If you wanted to know which distilleries are most beloved, they all have their fans.

In recent years, the fastest-growing American whiskey brands have been new ones, like Maker's Mark, Knob Creek, and Woodford Reserve. Brown-Forman has had some success reviving Old Forester, but that is a unique situation.

In general, pre-prohibition brands have not fared well in the current era. Jack Daniel's is just about the only exception.

Four Roses could perhaps be an example but it too is in many ways unique.

But perhaps reviving pre-Prohibition brands is the next big thing. Keep an eye on Buffalo Trace and Old Taylor.

Buffalo Trace Welcomes Old Taylor Home.

Although it remains unclear what Sazerac is going to do long-term with the recently-acquired Old Taylor brand, in the short term they are having some fun with it.

On Wednesday, July 29, there will be a "welcome home" event for Old Taylor at Sazerac's Buffalo Trace Distillery. That's the day the barrels of whiskey they're receiving from Jim Beam arrive. As part of the deal, Trace got 1,800 barrels of aging bourbon, although no one has revealed the age or ages of the whiskey.

An event like this, on a Wednesday afternoon, is mostly intended for the local community. There will be cocktails, of course, hors d'oeuvres, and a special "Taylor Tour." Having events for the local community is smart. Community goodwill is valuable for any business, but Buffalo Trace is in Frankfort, the state capital, so the "local community" includes legislators and other government officials.

Edmund Haynes Taylor, the man behind the Old Taylor brand, played a major role in the development of what is now Buffalo Trace. He was also in many ways the father of the modern bourbon industry, as well as a prominent and respected community leader. Taylor was first elected as Frankfort's mayor in 1871 and succeeded himself seven times. (It was a two-year term.) After that he was elected to the state legislature, first as a representative, later as a senator. During his senate career he depleted a significant part of his fortune lobbying for the capital to remain in Frankfort as his fellow lawmakers tried to move it to the much larger community of Lexington.

Taylor's story is a reminder that whiskey-making is a respectable business and a signature industry for the commonwealth. Most of the companies today are not locally owned but they have local employees and pay a fortune in local taxes.

Beam, which owned the Taylor brand for a bit more than 20 years, never had a natural connection to its heritage and never did anything with it, the heritage or the product itself. Buffalo Trace is certainly a better fit and perhaps trying to figure out their long-term plan is pointless. Old Taylor today is a very small brand and unlikely to become a much larger one. The price Trace paid for it was not very high and may have been worth it just for these little PR nuggets.

Tuesday, July 7, 2009

Brown-Forman Cooperage Opens for Tours.


Brown-Forman announced today it is opening the Brown-Forman Cooperage to the public for tours for the first time in its history. The Cooperage is being re-named from Blue Grass Cooperage to Brown-Forman Cooperage to honor its parent company.

The Brown-Forman Cooperage makes barrels for aging such Brown-Forman products as Jack Daniel’s, Woodford Reserve, Old Forester, Early Times, Canadian Mist, El Jimador and Herradura. Brown-Forman is the only spirits company in the world that makes its own barrels, which are crafted from American white oak.

Brown-Forman Cooperage tours must be arranged in advance through Mint Julep Tours (502-583-1433). Also available through Mint Julep Tours is the “All Woodford, All Day Tour,” which includes transportation to both the Brown-Forman Cooperage and Woodford Reserve Distillery, a tour guide host, admission to both venues, and lunch.

With the opening of the Brown-Forman Cooperage for tours, the general public will have a chance to see all aspects of barrel-making, from the natural air-drying of the staves and other parts, to barrel assembly, charring, and finishing.

"The aromatic smells are the best part of the tour," said Brown-Forman Master Distiller Chris Morris. "By toasting and charring these barrels, we activate natural flavors and aromas in the wood which give our spirits such distinct tastes."

Brown-Forman founded the Cooperage in 1945, and while a great deal of technology has been added to enable the production of more than 1,500 barrels per day, a trip inside is a step back in time.

“We know oak barrels were introduced to the world by the Romans more than 2,000 years ago,” added Morris. “The Romans obviously didn’t have the technology we have available today, but we are still following the same processes they followed back then.”

Friday, July 3, 2009

One More Effen Thing.


This is the final part in a three-part series about recent moves by Beam Global Spirits and Wine. Part one is here. Part two is here.

For the past decade, Beam has been part of various distribution alliances which helped it and its partners compete more effectively against Diageo, the world’s largest drinks company. Until recently, one of Beam’s partners was Absolut Vodka. When Absolut came up for sale, Beam sniffed around but the prize went to another sometimes-partner, Pernod Ricard, which immediately ended the distribution compact.

Beam wants to be a major international distilled spirits producer but you can’t be a major international distilled spirits producer without a premium vodka.

The closest thing Beam has now is Vox. Never heard of Vox? Exactly.

Effen Vodka isn’t a major brand, far from it. It is a tiny blip on the radar screen but Beam sees potential, as it does in Cruzan Rum.

The biggest problem with Effen is that its Achilles heel is also its only asset. The brand’s whole selling proposition is a dirty joke. Calling a vodka “Effen”—regardless of whether it really does mean “smooth” in Dutch—is the lowest form of drunken frat boy humor. At best, it is funny once.

Beyond that, what? It’s imported from the Netherlands (so is Vox, by the way)? It’s distilled five times using a patented distillation process? So Effen what? To borrow a metaphor from Terry Sullivan, it doesn’t matter if it is filtered through the hair of 1,000 Dutch virgins. This product’s name is one that can be spoken only by smirking adolescents, albeit of legal age.

Can you think of any major brand based on a vulgarity? Maybe Hooters, but they at least deliver on the name. What is Effen’s brand promise?

“Effen Vodka is an excellent fit with our brand portfolio, and we’re excited to put our sales and distribution muscle behind it to accelerate the brand’s growth,” said Matt Shattock, president and chief executive officer of Beam Global Spirits & Wine, in last week’s press release. “Effen has built a strong following in select markets, and we believe our sales and marketing organizations can help expand distribution and build excitement for Effen in many more markets in the U.S. and around the world.”

With annual net sales of approximately $10 million, Effen’s distribution is currently concentrated in Chicago, Southern California and major Florida markets. The Effen product line includes Effen Vodka, Effen Black Cherry Vodka and limited edition Effen Raspberry Vodka.

The Effen ad pictured here is not Beam’s. It was done by a previous owner. Can Beam afford to walk away from that positioning? What else does Effen have?

Building a vodka brand to rival Absolut may be a pipe dream anyway. Haven’t consumers finally begun to realize what “100 percent grain neutral spirits” means? Aren’t most major vodka brands exclusively pushing their flavored expressions? Yet Bacardi paid 2.2 billion for Grey Goose in 2004, and Pernod paid $8.3 billion for Absolut in 2008, so apparently vodka is not over yet.

The die is not necessarily cast. Perhaps Beam just sees Effen as a profitable niche brand for up-market vulgarians, but you can hear in Shattock’s words a belief that Effen just might, in time, fill the void left by Absolut. The scary part is that Beam has such a great track record he may be right and Effen will be the biggest Effen thing since Grey Goose.

Thursday, July 2, 2009

Will You Survive the Knob Creek Drought?

This is part two of a three part series examining recent moves by Deerfield-based Beam Global Spirits and Wine. (Part one is here.) In this installment, we find the company, unable to meet consumer demand for one of its key products, bragging about that fact.

The Knob Creek brand is less than two decades old. It always has been a 100° proof, 9-year-old, Kentucky Straight Bourbon Whiskey. The only way to make 9-year-old whiskey is to put it in barrels and wait 9 years. This obvious fact makes it possible to run out, which Beam has done.

That doesn’t mean we have to wait 9 years for more. In November, the next batch will be of-age and ready. It won’t take very long to dump, bottle and ship a bunch of it just in time for Christmas.

Beam makes a lot of whiskey but sells nothing older than Knob Creek, so it doesn’t have extra stocks of old whiskey sitting around that it can divert. There will be no more Knob Creek shipments until November.

A shortage like this is to some extent a choice, in that Beam saw this coming and might have managed it differently, such as through allocation. In that sense you can say the shortage was manufactured, but that doesn't mean it's not a real shortage. It's just that having it happen in this particular way was a choice.

Some other brands in recent years, faced with a similar challenge, have gone NAS (no age statement). Beam chose to keep the age and accept the shortage. If all goes well, Knob shortages will become a regular occurrence.

One thing they are doing that may undermine their positioning is this idea that the currently-aging whiskey magically becomes Knob Creek precisely on its 9th birthday. In whiskey as in people, maturity isn't just a number.

None of this means you can’t go out today and buy a bottle of Knob Creek Bourbon. Beam hopes you will. Retailers and distributors still have inventory, just no way to replace it. This happens with products all the time, though usually it’s just a production planning hiccup and the shortage doesn’t last six months. This shortage is caused by the implacability of the whiskey aging process combined with better-than-expected success for Knob Creek.

Beam hopes attention generated by the shortage will cause people to rush out, snag the rare remaining bottles, empty the pipeline, and then queue up to ensure that the next batch sells out even faster than this one did. If that sort of marketplace manipulation offends you, grow up.

To fan the flames, Beam is sending “I survived the drought” t-shirts to consumers, while trade audiences are receiving an empty, sealed Knob Creek bottle with the message, “thanks for nothing,” a backhanded way to say “thank you for helping make Knob Creek so successful.”

While the Red Stag introduction and the Knob Creek campaign are both potential winners, the future for Effen Vodka may not be so rosy, but this is Beam so hedge your bets. Learn why tomorrow.

Wednesday, July 1, 2009

Are Beam’s Latest Moves Good Bets?

You should never bet against Beam Global Spirits and Wine. You will rarely win.

Only two American straight whiskeys are major international spirits brands. Jim Beam is one of them. Twice in its history, the Beam company has more than doubled in size by absorbing a major rival. As a marketing and sales juggernaut, Beam makes few mistakes. It is bold when it needs to be, but seldom reckless.

Generally, those folks in Deerfield know what they’re doing.

Three recent moves deserve examination in the context of Beam’s legendary marketing and sales savvy. They are the introduction of Red Stag by Jim Beam, a new PR campaign for Knob Creek Bourbon, and last week’s acquisition of Effen Vodka from Sazerac.

We’ll look at Red Stag today, Knob Creek tomorrow, and Effen on Friday.

The risk with Red Stag, a combination of Jim Beam Bourbon, black cherry and other natural flavors, was that it would hurt the company’s flagship brand by making it seem less hand-crafted and more manufactured, like a flavored vodka.

Predictably, some purists objected. The flavoring of whiskey is a touchy subject due to the long, sad history of counterfeit hooch, similar to what we now call blends but which were—a century ago—misrepresented as straight whiskey. Red Stag, which is more like a pre-mixed cocktail, has nothing to do with all that, but the combination of ‘flavoring’ and ‘whiskey’ still brings out those passions.

The attractive origin story for Red Stag involves a Beam R&D guy at the Kentucky distillery, who would mix up something like Red Stag to take deer hunting, which also accounts for the name (much as Wild Turkey was named after a wild turkey hunt). The marketing folks concede that their research discovered the target demographic (young adult males, of course) already mixes Jim Beam with cherry cola, so Beam and cherry wasn’t a stretch.

Red Stag is still deep in the sampling phase of its national rollout so it will be months before its fate is known.

While Red Stag can be viewed as something conventional in consumer product marketing terms, a line extension launch; the new Knob Creek campaign is very much abnormal. That’s tomorrow.