George Dickel, the Boot.

I sure have been writing about George Dickel a lot lately. If you want to see all of them, that's what the labels at the bottom of each post are for. Click on the "George Dickel" label and you'll see every post in which George Dickel is mentioned.

Today I rise to add a small point. In Friday's post, I mentioned that the earliest record of George Dickel being in business in Nashville is from 1853. What I failed to mention is that he was not in the liquor business. He was a manufacturer of boots and shoes.

Austin Nichols, the parent company of Wild Turkey before it was acquired by Pernod Ricard, was a grocery wholesaler who started to sell wine and liquor, found it to be a very good business, and eventually dropped the groceries. That makes sense, I can see that happening, but how do you go from making boots and shoes to selling liquor?

Was that always his dream?

I can hear it now: "Humble shoemaker George Dickel had big dreams. He wanted to sell alcohol, because alcohol makes people happy and makes their pain go away, if only for a little while."

Or maybe he thought the whole Germans and boots thing was just a little too on the nose.

Dickel Checks In.

I just got off the phone with Gene Song, Brand Manager for George Dickel at Diageo. He was very nice, but I can't say he told me anything to make me regret or take back what I wrote yesterday. 

There are a few things to report on the availability story. The shortage of Dickel No. 8 really has not abated, but the younger Cascade Hollow Recipe is selling well. They haven't decided whether or not the Cascade recipe will remain after they have sufficiently resupplied No. 8, but they certainly seem to be leaning in that direction. As for the shortages of Dickel No. 12 that people have reported, here and elsewhere, Song isn't willing to say there is an official shortage, but supplies are tight. 

Basically, Dickel has been enjoying its share of the bourbon boom. The interesting part is that it is not being driven by export, as Dickel is sold only in the USA. 

So, on to the history. Song said the web site hasn't been updated since it was launched, so those statements aren't based on any recent discoveries. He attributes them to "oral history" put together by Ralph Dupps, who built and ran the current distillery for its then-owner, Schenley, starting in the late 1950s. Dupps passed away last December, at the age of 90. As I said yesterday, my telling of the Dickel story is based on a timeline put together by Nick Morgan about 15 years ago. At that time, he was the company archivist. Now he's in charge of marketing their Classic Malts portfolio. Song said they've asked him to comment on my questions, but he hasn't responded yet. 

The "oral history" explanation is frequently offered by the companies. Doesn't it seem odd that there isn't more documentation for some of this stuff? We're not talking about events that occurred 2,000 years ago. We're talking about Tennessee in the post-Civil War period, so 140 years ago and less. They had typewriters then, manila folders, filing cabinets. They kept a lot of business records. Why do all of these histories (the stories they want to tell, that is) have to be based on "oral history"? 

But I can't hang that one on Dickel or Diageo alone. That's everybody: Beam, Daniel's, etc. When the Dickel company (mostly the Shwabs, George was dead by then) moved to Louisville after Tennessee went dry, they brought their records with them. All of that stuff is in boxes at the old Stitzel-Weller Distillery in Shiveley. I know there is a lot there documenting the Dickel company's relationship with the A. Ph. Stitzel Distillery, which made Cascade Tennessee Whiskey until National Prohibition put everybody out of business in 1920. 

Song did provide one interesting piece of documentation, the brand's trademark filing with the United States Patent and Trademark Office. The trademark was filed in 1895, but it cites 1870 as the date of first use, and the trademark is for "Cascade" Distillery Handmade Sour Mash Tennessee Whiskey Geo. A. Dickel & Co. Does that mean, contrary to other indications, that Dickel was marketing Cascade brand whiskey, made at Tullahoma, as early as 1870? Not necessarily, but it certainly suggests that someone was using the Cascade name that early, though I think it most likely was John F. Brown and F. E. Cunningham, the distillery's founders. 

On the other hand, most accounts put the founding of Cascade at 1877 or 1878 and, in fact, there is some good documentation that Brown and Cunningham bought the land that year, although that doesn't mean they weren't operating as Cascade somewhere else. There's no question Dickel himself was in business by 1870. That's the first year Dickel & Co. shows up in the tax records. Morgan puts the founding of Dickel's business as early as 1853, so the person who put down 1870 as the date of first use wasn't referring to the Dickel part of the mark. 

The 1870 clearly refers to the Cascade part of the mark. So the 1870 date on the trademark filing is pretty good evidence for a first use of Cascade, by somebody, in 1870. But not necessarily by George Dickel. In fact, probably not by George Dickel, contrary to what the web site claims. The 1895 filing unquestionably proves that Dickel and Cascade were one and the same by that point, but we pretty much already knew that. Company A buys Company B. Company A was founded in 1920. Company B was founded in 1820. Even though Company A is the entity that remains, having assimilated Company B, it can claim an 1820 origin if it wants to. In buying Company B, it buys Company B's history too. 

In 1888, 70-year-old George Dickel takes a fall off his horse and withdraws from active participation in the business. His partner, Victor Shwab, is in charge. In short order he buys controlling interest in the Cascade Distillery and the Dickel Company becomes exclusive distributor for Cascade whiskey. Seven years later, when Dickel submits the trademark application, it invokes the assimilated company's history as its own. There is nothing wrong with that, but you should use the assimilated company's actual history, not a made-up history that projects Company A's principal into Company B's narrative almost 20 years before it actually took place. 

The most likely history is still the timeline Nick Morgan put together in the early 90s, as it cites to actual documents, not oral history. It's unlikely that George and Augusta Dickel ever visited Tullahoma. If putting George Dickel in Tullahoma at any point is the goal, that's a problem. His business was in Nashville, not Coffee County. When I have these conversations with brand managers, they always tell me how much they care about the industry's history. Well, talk is cheap. Where is the company that will step up, fund some real research, publish the results, and let the chips fall where they may? It won't make the whiskey taste any different either way. 

Finally, if you're still reading this, welcome to my world. I don't know why I concern myself with this stuff, but I do, and if you're curious enough to read it, well, then you're probably not much better. It can be fun, it can be frustrating, but most of all it's mighty thirsty work.

We'll Get Back To You, Not.

A month ago, I wrote here about likely bullshit in the marketing of George Dickel Tennessee Whiskey. Though perhaps my process is backwards, the next day, better late than never, I sent my questions to the Manager of Public Relations at Diageo, Dickel's parent company. Two days after that, I received a call from one of the minions in Diageo's PR Department, wanting to know why I was asking so many questions. We had a pleasant conversation and she said she would get back to me.

Since then, squat.

Today, I sent an email to the original contact, laying out the chronology above. However, since it has been a month since my original inquiry, I now feel confident in saying that the new story Diageo is telling about Dickel, about how George and his young bride, Augusta, visited Tullahoma in 1867, where he dreamt about "creating the finest, smoothest sippin’ whisky," and then started a business there in 1870, is pure fiction.

Why does is matter?

The Keebler Elves were created in 1968 by the Chicago-based advertising agency, Leo Burnett Co. One of Burnett's trademarks was the use of mascots, fictional and, usually, illustrated characters who personified the brand's advertising proposition. The difference between Ernie Keebler and George Dickel is that George Dickel was a real person. So was Agusta Banzer Dickel, who had a younger sister, named Emma, who married George Dickel's business partner, Victor Shwab. All real people.

Not only were all of those people real, with real histories, but the things they did matter. The history of commercial enterprises may not be as significant as the history of governments, but they are part of the overall story of how we developed as a nation and people. The history of America's alcoholic beverage industries may be more important than most because they contributed so much to the nation's development in terms of taxes, and alcohol is the only industry that has prompted two constitutional amendments.

Part of what stimulated me to start taking a hard look at Dickel was the Associated Press report in December about a shortage at retail of George Dickel No. 8. Diageo spokespeople at that time cited the distillery shutdown between 1999 and 2003 as the cause of the shortage, and further stated that the shutdown was a result of overproduction in the early 1990s.

What caused that overproduction was an ambitious but ultimately unsuccessful attempt to make George Dickel a one-million case brand. One-million cases is the traditional threshold in the distilled spirits business for a major brand. One of the things they did at that time was try to put together a real history of Dickel. The person who spearheaded that effort was Dr. Nicholas Morgan, who was archivist at that time for Dickel's parent company in Great Britain. He had some research done and put together a timeline of key event's in Dickel's history. I have a copy of that timeline and it is through comparing that to what the company is saying now that the pattern of historical falsification (aka, bullshit) is revealed.

Nick Morgan is still at Diageo and is a big marketing honcho for their single malt scotch portfolio.

The practice of playing fast and loose with history is not unique to Diageo. Far from it. Virtually every company that sells American whiskey is guilty of at least some fudging with history. To some extent, it depends on how it is handled. Many of the things Brown-Forman says about Jack Daniel's are unproven and probably unprovable, but they call them "Legends and Lore." Jim Beam has no real evidence that, as they say, Jacob Beam sold his first barrel of whiskey in Kentucky in 1795, but the family has been saying that for a very long time so it's probably at least as good as some of the Daniel's claims. On the other hand, more recent fudging such as writing out of their history the contributions of Jim Beam's brother, Park, and his descendants, is of more recent vintage and, in my opinion, deplorable.

In one sense, at least, I can't complain too much about any of this because it gives me something to do. If you want the real history of the American whiskey industry, you pretty much have to come to people like me, because you're sure not going to get it from the companies.

Diageo Checks In.

I heard from someone at Diageo today, wanting to know why I'm asking so many questions.

She didn't say it exactly like that. It was more like, "I just wanted to get some more information about what you're going to be writing about and why exactly you need all these details about Dickel, is this for a story or an upcoming book?"

We had a nice chat, but no answers yet. Stay tuned.

Better Late Than Never (We'll See).

I have better contacts at some of the American whiskey producers than I do at others. I don't know anybody at Diageo. I know Tom Bulleit (Bulleit Bourbon) and I met the Diageo brand guy responsible for North American whiskey (big gun is Crown Royal) once about three years ago. That's it. But I do have a name of somebody in PR who did return an email from me once, so I tried her on the Dickel questions. 

Here's what I asked: 

"What is the status of Dickel No. 8, re the shortage reported by AP in December? Will Cascade Hollow continue to be distributed after No. 8 returns? Are there shortages at retail of Dickel No. 12 and Barrel Select too, as has been reported to me?

"Also, I noticed on the Dickel web site what appears to be some new historical information. I would like to know the basis for the claim that George and Augusta Dickel visited Tullahoma in 1867 and that George Dickel established a business there in 1870. 

"Most accounts with which I am familiar have Cascade Distillery established in 1877/8 and independent of Dickel until 1888. Those particular dates come from Dr. Nicholas Morgan, who was archivist for United Distillers pre Diageo. That information is more than 10-years-old, so maybe something new has been discovered." 

That guy from Utah got mad at me for not talking to him before I wrote what I did about his product. Maybe Diageo will feel the same way. I'm sympathetic in principle, but since I'm writing, in both cases, about stuff they've either published directly or caused to be published through the magic of PR, I feel like they already had their say. I have not, by the way, heard anything more from either the High West guy or the Templeton guy.

What Is Really Going On With George Dickel No. 8?

Whiskey is weird.

How many other products can you name that take four or more years to manufacture? We always talk about this, how the whiskey aging cycle challenges distillery production planners. The story of George Dickel No. 8 Brand Tennessee Whisky demonstrates what can go wrong.

In the early 1990s, United Distillers was a company with big plans. The spirits division of Guinness & Co., it had been built by acquisitions over the previous decade. It was an international company with major brands in the scotch whiskey and American whiskey categories, as well as gin, rum, and others.

Among its assets was George Dickel Tennessee Whiskey.

One of the company’s big plans was to take selected American whiskey brands and give them a big marketing push in Europe and Asia, where American whiskey was starting to grow as a category, unlike the U.S. market, where it was doing nothing. One of the brands selected was George Dickel.

As a Tennessee whiskey, Dickel is a unique product. Unlike United’s many bourbons (at the time), the George Dickel recipe is shared by no other brands. Because of the whiskey aging cycle, any long-term sales growth strategy has to be accompanied by steady production growth, so that when the marketing plan succeeds, you have enough product to sell. United started to make more Dickel, a lot more.

The effort to sell more Dickel overseas wasn’t a failure exactly, but it didn’t meet expectations either. Part of the problem was that the newly huge company was unwieldy and often lacked focus. Dickel was too far back in the portfolio to get the attention it needed. Because the whiskey made at Dickel could only really be used for the Dickel brand, the stocks built up, and because nobody was paying close enough attention, they just kept producing.

In 1997, Guinness merged with Grand Metropolitan to form Diageo. To accomplish the combination, the company assumed a lot of debt. It soon had to start selling assets to generate cash and also cut costs wherever it could. It decided what its core business would be and, by 1999, it had decided that American whiskey was not part of that picture. Early that year, it sold off all of its American whiskey assets except two brands, I. W. Harper and George Dickel. It also stopped production at the Dickel distillery.

In addition to the excess whiskey inventory, Dickel had some environmental issues in Tennessee, having to do with wastewater disposal. They weren’t a huge deal but would require a significant investment to fix. Because of that, the company couldn’t casually crank up the distillery for a few weeks each season, just to keep some current production in the pipeline. They had to stay completely dark and take their chances.

When they stopped Dickel production, they pretty much stopped marketing it too. That will tell you what the underlying strength of a brand is. Maybe that was their plan, maybe there was no plan beyond stopping the bleeding and making the brand profitable again. With the distillery closed and the marketing budget at zero, it wasn’t too hard to make the brand profitable in the short term.

At that time, now almost nine years ago, product availability seemed like the least of their problems.

In 2002, Diageo began to pay some attention to Dickel again. The brand got a marketing budget and started to make some noise. Either the marketing worked, or it was just time, you never know exactly, but Dickel sales suddenly picked up here, there, and everywhere. They got their environmental problems fixed and resumed production in fall of 2003.

The new marketing program featured the premium Dickel expression, known as No. 12, but the less expensive No. 8 continued to be the main seller. In about the middle of 2007, Dickel No. 8 drinkers began to notice bare shelves. In some cases there was a note on the shelf explaining that No. 8 was in short supply because of the 1999-2003 distillery shutdown. Ads in a few markets explained that the shortage was being caused by the shutdown, combined with “an incredible surge in demand for George Dickel No. 8."

No company gets itself into a situation like that on purpose, but when you find yourself with that kind of problem you try to make the best of it. One tactic has been to generate publicity about the shortage itself. Nothing makes people want something like telling them they can’t have it. Another has been to release a temporary stop-gap, a new product called Cascade Hollow Recipe, aged three years. The strange thing is, the Cascade Hollow label looks almost exactly like the No. 8 label and it is being sold for the same price. It’s obvious that many shoppers, grabbing for the familiar black label, will never notice it’s a different product, a fact no doubt anticipated by the brand’s management.

Since the company could easily have made the Cascade Hollow packaging look completely different, why make it virtually indistinguishable from the No. 8? The strategy, it appears, is to have it both ways. They’re being upfront with the people who are paying attention while hoping to slip one past the people who aren’t.

Here are some simple facts the people at Diageo aren’t talking about.

No Dickel product except the new Cascade Hollow carries an age statement. It has one because it is required to, by law, because it is less than four years old. Unofficial statements by distillery personnel have pegged the top-of-the-line Dickel Barrel Select product as containing whiskey 8 to 12 years old, the No. 12 as 8 to 10 years old, and the No. 8 as 4 to 6, but those ages are all unofficial. They are trying to match a taste profile, of course, and if the whiskey starts to taste a little younger they hope no one will notice. Having no age statement gives them a lot of flexibility. With no age statement, all you know for sure is that the whiskey is at least four years old.

Regardless of what age it actually is, the oldest and most mature whiskey they have is going into the more profitable No. 12 and Barrel Select expressions. Those are reporting no shortages.

On Monday, the Associated Press (AP) ran a story in which a Diageo vice-president acknowledged the “temporary” shortage and promised that No. 8 will return early in 2008.

What seems underway, then, is an effort to turn a problem into an opportunity, always a good idea. By next year, Dickel hopes to be in greater demand than ever thanks to publicity generated by the shortage. The AP story alone was picked up by thousands of print and electronic outlets. When No. 8 returns, the company will have a new entry-level product on the shelves and its best-seller, the No. 8 Brand, will reappear, maybe at a higher and more profitable price. Then maybe they will start to change the two labels to give the two products more separation. They’ll transition price-sensitive shoppers to the Cascade Hollow product and get a little more scratch from No. 8 loyalists.

Let’s hope for their sake that all this works out better than their last master plan.