Tuesday, July 26, 2011

The Small Barrel Debate.

Last month John Hansell, publisher and editor of Malt Advocate, wrote on the subject of small barrel aging, which has become a big issue with micro-distillers, many of whom insist that spirits 'age faster' in a small barrel.

(We're talking barrels in the range of 10 to 30 gallons. A standard whiskey barrel is 53 gallons.)

Hansell, in my opinion, framed the issue correctly. "Do smaller whiskey barrels mature whiskey faster? Or do they just make whiskey taste woody faster?" For some people, those are fighting words, and his post drew over 100 comments.

Here is something I posted on this subject last year.

This topic also comes up regularly over on the ADI Forums, most recently under the subject line of "Charcoal Filtering of Whiskey."

Some of this has to do with language. I'll probably always disagree with someone who says "small barrels age whiskey faster," because it's a claim that one can get the exact same results in less time using small barrels, which is almost certainly false.

The real questions here are: Do small barrels age differently? (Almost certainly, the answer is yes.) And, if they do, how can the spirit so aged be characterized, and are the results good, bad, or indifferent?

One observation on the ADI discussion is that everyone just assumes whiskey aged in small barrels will only get better, that the benefits of the small barrel accrue at every age, and I'm not so sure that's right.

Clearly, the small barrel accelerates extraction, but extraction is just one part of aging, and there is more tannin in that barrel than anything else. That is Hansell's point. Faster tannin absorption means the whiskey may become overaged and bitter sooner. By the time you get the oxidation you're looking for, something which only comes in time, you may have too many extractives. It doesn't necessarily balance out.

As for the Lincoln County Process (the intense charcoal filtering done by Jack Daniel's and George Dickel), distillers in Kentucky quite routinely and unselfconsciously refer to it as 'charcoal leaching.' They, and their counterparts in Tennessee, usually will accept my characterization of it as jumpstarting the aging process, but many in Kentucky feel it ruins the whiskey by stripping out too much flavor.

One drinker's 'smooth' is another's 'bland.'

Monday, July 18, 2011

Marketing Micro Spirits (Or Anything, For That Matter).

It came up recently on a site frequented by micro-distillers whether or not brand-imprinted golf balls are a good marketing vehicle or a waste of money. After several producers offered opinions, pro and con, I submitted this:

"There are no good or bad marketing tactics. (Giving away branded premiums such as golf balls is a tactic.) There are only tactics that support and advance your brand proposition (good) and tactics that do not (waste of money). The same exact branded golf balls may be a great tactic for one company and a terrible waste of money for another, depending on their brand propositions and strategic plans."

These questions flare up from time to time. What's interesting is that when the question is posed as it was originally -- "Golf Balls, Good or Bad" -- the opinions come flying. Then I make a statement like the one above and the discussion stops. That I seem to be good at closing discussions is interesting but beside the point. The question this raises is, how many of today's fledgling craft distillers have given any real thought to marketing? And how many have any grasp of basic marketing principles?

A few do. In some cases, at least one of the company's principals has a marketing background. Some are just naturals. Salesmanship can be taught but for some it's a matter of instinct. If you have talented sales people in your family or if you have been acquainted with them in a past business relationship, and learned their lessons, you may have a good grasp of the principles without being able to articulate them formally.

But I can tell from some of these discussions that in many cases, the people starting small distilleries haven't given the marketing of their products a second of thought. In a few cases, I've talked to small distillers who are hostile to the very idea of marketing, as somehow contrary to the purity of their endeavor. "A superior product doesn't need marketing."

Good luck with that.

Here are the basics of salesmanship and, by extension marketing, as I have distilled them down from 40 years in the business.
  • Learn everything you can about your customers and prospective customers.
  • Listen and let them tell you what they want.
  • Tell them what you heard.
  • Give them what they asked for.
Yeah, it is that simple.

Sales, marketing, product development, pricing, and distribution are all pieces to the same puzzle. You can't manage any of them in isolation from the others. Trying to do so is a good formula for failure.

Sunday, July 10, 2011

The Stranahan's That Was.

Even as Stranahan's announces a new plan to triple production so it can once again distribute outside of Colorado, I glanced back at a post I made almost two years ago. In it, Stranahan's was naming a national distributor. The brand was then in 35 states and four foreign countries, and the distributor was going to take them even further.

I'm not criticizing Stranahan's for retrenching. I'm not criticizing them for anything except one pretty terrible sin. They have broken trust with their consumers by not communicating about the changes they've been going through.

That's irrational and potentially fatal. If nothing else, it's going to be expensive to repair the damage.

Keep Vulgarity In Its Place.

I like vulgarity as much as the next guy, but I'm glad it's not everywhere and I would prefer that it stay out of advertising. Vulgarity has power because it's transgressive, anti-establishment, risky. Nothing sucks the juice out of expression or imagery faster than advertising. Plus advertising is plenty vulgar enough already.

I say this as someone who has worked in advertising for 40 years.

Put the middle finger salute in advertising and pretty soon it will be on the Disney channel. 

So that's why I would just as soon that neither Wild Turkey nor Old Crow give me the bird.

For one thing, it's not that funny.

Sort of like Effen Vodka.

Friday, July 8, 2011

Michter’s To Build Micro-Distillery On Louisville’s Whiskey Row.

Louisville’s newspaper, the Courier-Journal, reported Wednesday that Michter’s Distillery (i.e., Chatham Imports) will invest $7.8 million to renovate the historic Fort Nelson Building at Eighth and Main streets, and establish Louisville's first downtown distillery since before Prohibition.

The big announcement brought out the governor, Steve Beshear; Louisville Mayor Greg Fischer; and the president of Louisville’s Chamber of Commerce, all of whom spoke, along with Chatham president Joe Magliocco.

The site is across Main Street from the Louisville Slugger Museum. Public tours and tastings are scheduled to start in spring of 2013.

Louisville’s Main Street was ‘Whiskey Row’ during the Kentucky whiskey industry’s 19th century heyday. Dozens of companies had offices, warehouses, and rectification facilities there, primarily because it was adjacent to the Ohio River waterfront.

Heaven Hill wasn’t there then but they have had their Louisville offices on Whiskey Row for many years. Louisville-based Brown-Forman, founded in 1870, now has a building there too. Members of the Brown family have privately been leaders in the preservation and redevelopment of the old Whiskey Row district.

The street is architecturally-significant as it has the largest concentration of 19th century cast-iron facades outside of New York City.

It’s a nice, attractive part of downtown with a real feel for Louisville’s history.

For several years, Lincoln Henderson’s Louisville Distilling Company (Angel’s Envy Bourbon) has talked about opening a micro-distillery on Main Street. It hasn’t happened. In this case, too, I'll believe it when I see it. Right now it’s just a ‘plan.’ No details were given.

Assuming it does happen, this is smart strategically for Chatham. This has been a fairly obvious idea, just sitting there, for one of the non-distiller producers to adopt. The idea is to use a micro-distillery to create a ‘home place’ for a non-distiller brand. That’s marketing jargon for a physical location fans of a brand can visit, thereby deepening their relationship with the brand. Brands that have picturesque distilleries, such as Jack Daniel’s, Maker’s Mark, and Woodford Reserve, have that built in. A brand like Michter’s has to create it.

Louisville’s Whiskey Row is not only perfect historically, it also happens to be near many of Louisville’s most popular tourism attractions.

There are several other brands, most notably Diageo’s Bulleit, that should have done something like this but Chatham beat them to it. Good for them.

Something similar was done once before, by Michter’s. In 1976, they installed a micro-distillery at the distillery in Schaefferstown, Pennsylvania. It was capable of producing one barrel of whiskey per day. It would demonstrate the distilling process to visitors when the big distillery was shut down, which in those dark days it usually was.

That original Michter’s micro-distillery also made news recently, although no big politicians showed up. I told you about that here.

Michter’s participated in the KBF Sampler in Bardstown for the first time this past April, signaling that they intended to establish a Kentucky presence. There they told people that they “moved to Kentucky from Pennsylvania in 1989.” So they still have a lot of the phony-baloney going. That doesn’t change the fact that this is a smart and bold move, and so far they’ve played it well.

Michter’s doesn’t have a distillery but it has a distiller, Willie Pratt, who had a previous association with Brown-Forman. He also participated in Wednesday’s announcement.

The only connection between the current Michter's and the original is the name, which Chatham Imports acquired a few years ago. Chatham is one of those small, non-distiller producers that markets a number of specialized brands. If the main photo on their web site home page is any indication, Michter’s has become their flagship.

Chatham is small but they know the business. They were smart enough to recognize how much the Michter’s name was worth and now they are willing to invest to develop its full potential.

Since reviving the Michter’s brand (not in 1989, 1999 more like it) Chatham has worked with Kentucky Bourbon Distillers (KBD) of Bardstown as their whiskey broker, bottler, and DBA. No one at Chatham, nor at KBD, has any connection to the distillery in Schaefferstown.

KBD doesn’t distill either. Heaven Hill is always assumed to be the source of KBD’s whiskey. KBD gets a lot of whiskey from Heaven Hill, which is located right across the street, but KBD’s whiskey comes from other sources as well. People who have been in their warehouses recently report seeing barrels from Barton, Brown-Forman, and other producers.

Chatham doesn’t treat Michter’s like a mere brand name. They foster the illusion that it is a real distillery with roots in the 18th century. Here is the real history.

Michter’s is a brand name created in 1950 by a guy named Lou Forman. He combined the first names of his two sons, Michael and Peter, to come up with something that sounded vaguely Pennsylvania Dutch, which was appropriate for a distillery in Schaefferstown, Pennsylvania.

For most of its history the distillery there was called Bombergers, after the family that owned it from 1861 until Prohibition closed it. Forman bought it in 1950 and renamed it Michter’s. He sold it in 1956 and the name was changed to Pennco Distillers. Forman bought it back in 1975 and it was known as Michter’s thereafter, until it closed for good in 1990.

When Chatham executives (or doting Louisville officials) talk about the whiskey given to Washington’s soldiers at Valley Forge, they’re talking about whiskey made at Johann Shenk’s distillery, which was founded on the Schaefferstown site in 1753.

Today the distillery site in Schaefferstown is in ruins.

Why is there so much interest in a little Pennsylvania distillery that has been dead for more than 20 years? So much interest that the mere name seems to have magic in it?

First, it had a genuinely rich heritage, which it exploited through heavy promotion of tourism during the last ten years of its existence. Also during that period it did a big business in collectible decanters. So a lot of people knew about the place.

Second, the master distiller there for many years was Everett Beam, of Kentucky’s legendary whiskey-making Beams.

Third, one of the most lionized bourbons of the last 20 years, A. H. Hirsch Reserve, was whiskey made there in 1974.

None of this, of course, has anything to do with today’s Michter’s.

From a production standpoint, the micro-distillery is a gimmick. If they ever use any of the whiskey made there in the mainstream product, it will be a long time in the future and a drop in the bucket. The main thing is that Michter's will have a home place in Kentucky, a valuable marketing asset.

Presumably, since they were able to trot out all of the big dogs for the announcement event, this plan is more than talk. So despite my reservations, especially about the way they continue to play fast and loose with historical facts, I commend Chatham for this move. It’s a bet on bourbon, and I’m all for that.

Thursday, July 7, 2011

Bird Fight! Wild Turkey Sues Old Crow.

On June 21, I told you about the new Wild Turkey distillery in Lawrenceburg, Kentucky. I also told you about the brand's questionable new advertising campaign, built around the theme "Give 'Em The Bird."

So impressed by their own creative genius are the folks behind this campaign at Gruppo Campari (Wild Turkey's parent company) that they are suing Beam Global for using the line to promote Old Crow Bourbon. Campari claims Wild Turkey has used the slogan since 2006, when the brand was owned by Pernod. Campari bought Wild Turkey in 2009.

Old Crow was, of course, named after Dr. James C. Crow, a pioneering bourbon maker who died in 1856. The name "Old Crow" was used during his lifetime and Old Crow formally became recognized as a brand name not long after his death. The Wild Turkey brand was launched in 1940. That has nothing to do with the trademark case, but it's good to know.

As for which of them gave us the bird first, whichever one it is, I wouldn't brag about it. There is still such a thing as bad taste.

Isn't there?

In other bird-related trademark litigation, Beam Global has sued Diageo for failure to use its Jose Cuervo crow symbol in accordance with a 1997 agreement regarding Old Crow and other crow-related marks owned by Beam.

Friday, July 1, 2011

Stranahan's Peeks Out From Its Shell.

Stranahan's was one of the first micro-distilleries to penetrate the national consciousness with its Colorado Whiskey, a malt aged in new charred barrels for about three years. Last fall, the Colorado distillery was sold to Proximo Spirits and the company's normally garrulous principals fell strangely silent. I last wrote about the curious affair here, about six weeks ago.

Two weekends ago, Stranahan's disitiller Jake Norris participated in a whiskey and BBQ event that Stranahan's sponsors in Frisco, Colorado. On Wednesday Westword reported that Stranahan's is in the process of tripling its production capacity. 

The news was announced by a new player, general manager Pete Macca. The short article reads like a press release and was not written by Jonathan Shikes, who has done most of Westword's excellent coverage of the sudden and mysterious sale.

Distillery founder Jess Graber is still vacationing on another planet.