Tuesday, August 7, 2012

Basil Hayden Growth Confuses Bourbon Fans.

Last Thursday, in a little news digest post, I mentioned that Beam's Basil Hayden bourbon is up 33 percent in sales this year. If you read the comments, most are about that. Many readers found that news hard to swallow. Serious bourbon enthusiasts generally dismiss Basil Hayden as too light at 40% ABV, and too expensive at about $40 a bottle.

You shouldn't take too seriously a big one-time bump in sales on a small brand such as Basil Hayden. After 20 years in the marketplace, it is still a small brand. If it sustains a 33 percent growth trend over several quarters, then something is happening. If it does that, it won't be a small brand for long.

Eagle-eyed bourbonians have noticed that Beam recently received approval for a Basil Hayden label with no age statement (NAS). Just because a label is approved, that doesn't necessarily mean it's going to be used. I don't believe a NAS Basil Hayden bottle has shown up at retail yet.

The trend away from age statements has been to give producers flexibility, in this time of booming sales, to mix in some younger whiskey if it meets the brand profile. Many enthusiasts always believe the worst of the big producers, but the highest priority for most producers is to match the brand's flavor profile with each and every batch. It's not in their interest to make changes that actually change how the whiskey tastes, even if they can save a little money and put out a bit more volume by using younger spirit.

So what is moving Basil Hayden's needle? Beam seems to have had success focusing Basil Hayden on a cocktails-oriented, fashion and style-oriented consumer, something to drink while watching "Project Runway." Maybe it simply has taken 20 years for Basil Hayden to find its drinkers.

All four of the bourbons Beam calls The Small Batch Collection are very good but over-priced. The only one that seems appropriately priced for what it is is Knob Creek, which has been the most successful. There have been reports of Basil Hayden selling for closer to $30, but it's hard to know if they have permanently adjusted the price, or if they've just been dealing it a lot.

Heavy dealing can also account for a short-term 33 percent sales increase, which doesn't mean anything if they can't sustain the price point that's driving the extra sales. The idea, of course, is that deals drive sampling and usage, and the hope is that at least some of those consumers will stay with the brand after the price goes back up.

Most of the Beam bourbons are based on the Jim Beam recipe. Basil Hayden is not. It is based on the Old Grand-Dad recipe, which has about twice as much rye in the mash, and consequently less corn. It's still bourbon, not rye, but it has more rye flavor and may be enjoying some boost from the recent fascination with ryes.

14 comments:

Anonymous said...

Since Washington State privatized liquor sales a couple months ago, I've seen Basil Hayden priced at around $50.00 in some groceries, which results in a total purchase price of over $60.00 including 20.5% sales tax and $3.77 per liter tax.

Lazer said...

I like OGD, and I like BH, but why would I buy BH when OGD is basically the same thing but cheaper and higher proof?

Answer: Non-enthusiasts don't like to buy something called OLD. For instance OF becomes Larceny.

Anonymous said...

Baker's is the best small batch beam has. They just don't push it.

SteveBM said...

I like BH a lot. It's an easy drinking whiskey that I don't need to think much about. Doesnt blow me away, doesnt make me long for something better. It's just plain good. That said, I agree that it is not priced well at $40 on average. I think BH makes for a great crossover whiskey for a scotch/canadian drinker looking to get into bourbon. I also agree that the cocktail craze could be contributing to an increase in BH sales. Maybe you're right, Chuck. Maybe it just took BH 20 years to find it's drinkers?

BMc said...

On certain forums, the news that Wild Turkey rye was going from 101 proof to 81 proof provoked an uproar. Wild Turkey had claimed that the new one was more cocktail-friendly, in part because of the lower proof. The rebuttal was that no mixologist likes lower proof whiskies.

If BH is getting more and more popular with mixologists at 80 proof, then the people on the forum might have been misinformed. Maybe Wild Turkey did the "right" thing, at least as far as profit margins go.

Chuck Cowdery said...

I never said Basil Hayden is popular with mixologists. I said it is popular with cocktails-oriented drinkers. Not the same thing.

Jeff said...

I agree on the price of the small batch collection. The only one I buy reguarly is KC, and now KC single barrel. I know a few people who like BH b/c they find other 'premium' bourbons too hot, and BH at 80 is 'smooth.' I've found that for those who describe a whiskey based on smoothness, smooth has a vey high correlation with abv, with being a wheater often bumping 'smoothness' up a notch.

BMc said...

Ah, good call. Maybe I also mis-read the comments from guys at Wild Turkey, though. By lowering the proof of their rye, they are making a more presentable whiskey to "cocktails-oriented" drinkers, as well.

Chuck Cowdery said...

There is another aspect to this as whiskey in general gets more mainstream and American whiskey gets more international. Mainstream consumers, especially outside the U.S., have very little experience with spirits above 40% ABV and react badly when they encounter them. That doesn't mean higher proofs will go away, but marketing dollars are better spent against mainstream products. The U.S. enthusiast consumer, however, expects premium-priced spirits to be higher than 40%, even if just a little higher.

Doctor Tarr said...

If one finds a premium bourbon too "hot" one can always add water (that wasn't purchased at a premium whiskey price).

It may well be that the intent is to keep the flavor profile after bourbons go NAS, but it hasn't been my experience that they do. I think most would agree that Wild Turkey 101 and Evan Williams black label aren't what they used to be when they were eight and seven years old.

If Basil Hayden loses its age statement then what little incentive there is to buy it over Old Grand-Dad 100 or 114 will be gone. Oh, who am I kidding? The incentive isn't there for me right now.

Alext said...

I'm a American whiskey fan/addict from Australia and can support the comments on lower proof offerings, it's rampant here, IMO partially due to local taste preference, as mentioned, and secondly to the Australian Import tax structure which calculates duty based on alcohol by volume. One example of this is buffalo trace being sold at 80proof, 90 doesn't exist in this country (they still flog it for $50 though).

On a side note American whiskey still has a fair way to go for mainstream acceptance here as a "quality" product, in other words we are a nation of scotch snobs.

Anonymous said...

Chuck,
I agree with you that the Beam small batches are overpriced. I own hundreds of bottles of whiskey and the only bottle I have is KC.
Recently saw the KC single barrel for $50.
Ridiculous!

Anonymous said...

Very informative post,and I appreciate the comments thread. Thank you- I was curious about BH and was looking for some broader perspective before dropping some money on.

Anonymous said...

I came here as I was curious about the change to BH to NAS. I just bought some and compared it to a bottle with the old age statement and I think it has changed. I will not buy it again.