What was Beam thinking? Speculations........
Posted: Fri Oct 18, 2013 5:42 pmJim Beam is the world's largest selling bourbon, if you do not count Jack Daniel's as a bourbon, which most do not, even though I believe it could qualify.
That means they have vast resources. Which means they can, or should be able to, explore the demands and wants of their market. Now all this must fit into an extraordinarily complex enterprise. All their planning must be done, especially for their premium brands, well in advance of actual demand.
Now, I would expect that demand remains fairly consistent year to year. I would expect that the consumption of bread and butter bourbons (or Tennessee) whiskies is reliably predictable. And, I would expect (knowing that I could be and probably am, quite wrong in some of my assumptions) that plans proceed apace to meet those demands.
However, and about this I am unsure, what about the premium and super-premium brands? There would be enormous profits there (I think). If you make several recipes at the outset and put them up as such, where do the premiums come from? I suggest that they come from the palate (palates) of trained tasters, presumably with the oversight of a master distiller, who at this point in this game is more of a marketing agent than actual taster. Distillers have years of experience at barrel placement to achieve certain taste characteristics.... and years of experience at where they must aim most of their production. I would suggest that we BourbonEnthusiasts cast a rather small shadow over these deliberations, since the deliberations belong primarily to the financial guys and gals, not to bourbon lovers. Still, like all but a very few enterprises (I can think of none off the top of my head) the market has some volatility......... tastes do change. The Scotch, Beer, and Wine markets impinge upon the bourbon market as presumably the bourbon market might impinge upon the other markets.
So even the most secure of bourbon producers (cost vs production) which I assume would still be Beam, cannot afford to rest upon its laurels (from whence do you think Maker's Mark 46 came - a few well place wooden boards and a few extra months maturation - different taste profile ...... genius, I say). The easiest way to do this (I reiterate, this is mere opinion) is to take the course I assign to Beam.
Say you have some bourbon in your storage barrels that somehow got overlooked in fitting the profile for Beam White (maybe a bit better?), but at seven years it is not suitable for Booker's or for Baker's a bit later, and still not making the grade a few years later for Knob Creek....... and since it did not contain enough rye for Old Grand Dad, or a couple of years later for Basil Hayden's, this bourbon sat and sat, in the barrels.
Now, in an annual review of your barrels in storage you come across a significant number of unused barrels that are approaching 12 years of age. What to do? You know that aged bourbons often sell at premium prices, there are those off palate drinkers (yours truly) that find something unique in many (but not all) older bourbons. So let us create a new bottle, and sell this bourbon, not to aficionados of aged bourbon, but to regular Beam drinkers who (status conscious) might want to step up when they have a bonus or small increase in income, and/or perceived status. What's to lose? We can either put that bourbon in small doses into Beam White (as we do now) or dilute it to the point of it being inoffensive, and sell it as a premium bourbon. If we lose in this game, we won't lose much and what we will learn is how much the market is open to marketing an inferior bourbon as a premium product.
Beam's answer is: 'Let's put out at 12 YO Beam Premium bourbon'.
Were I a strategist at Beam, and believed in my obligation to maximize Beam profits within the window of opportunity, I would support this strategy. Do all distilleries support such a strategy?.......... Well, I think that depends upon the foresight of the people who lead their strategy. And, that strategy is dependent upon the interests of producing superb bourbon only in the degree to which it is perceived as in the distiller's long term interest. To do otherwise is to risk market share. Something that only small producers, or well funded distillers, can afford to do (e.g. Chris Morris at Brown Foreman)........... without great risk to the enterprise.
My opinion is that Beam is trying to be only as innovative as it thinks is minimally necessary to stay in this risky game. They may be right, I do not know.
That means they have vast resources. Which means they can, or should be able to, explore the demands and wants of their market. Now all this must fit into an extraordinarily complex enterprise. All their planning must be done, especially for their premium brands, well in advance of actual demand.
Now, I would expect that demand remains fairly consistent year to year. I would expect that the consumption of bread and butter bourbons (or Tennessee) whiskies is reliably predictable. And, I would expect (knowing that I could be and probably am, quite wrong in some of my assumptions) that plans proceed apace to meet those demands.
However, and about this I am unsure, what about the premium and super-premium brands? There would be enormous profits there (I think). If you make several recipes at the outset and put them up as such, where do the premiums come from? I suggest that they come from the palate (palates) of trained tasters, presumably with the oversight of a master distiller, who at this point in this game is more of a marketing agent than actual taster. Distillers have years of experience at barrel placement to achieve certain taste characteristics.... and years of experience at where they must aim most of their production. I would suggest that we BourbonEnthusiasts cast a rather small shadow over these deliberations, since the deliberations belong primarily to the financial guys and gals, not to bourbon lovers. Still, like all but a very few enterprises (I can think of none off the top of my head) the market has some volatility......... tastes do change. The Scotch, Beer, and Wine markets impinge upon the bourbon market as presumably the bourbon market might impinge upon the other markets.
So even the most secure of bourbon producers (cost vs production) which I assume would still be Beam, cannot afford to rest upon its laurels (from whence do you think Maker's Mark 46 came - a few well place wooden boards and a few extra months maturation - different taste profile ...... genius, I say). The easiest way to do this (I reiterate, this is mere opinion) is to take the course I assign to Beam.
Say you have some bourbon in your storage barrels that somehow got overlooked in fitting the profile for Beam White (maybe a bit better?), but at seven years it is not suitable for Booker's or for Baker's a bit later, and still not making the grade a few years later for Knob Creek....... and since it did not contain enough rye for Old Grand Dad, or a couple of years later for Basil Hayden's, this bourbon sat and sat, in the barrels.
Now, in an annual review of your barrels in storage you come across a significant number of unused barrels that are approaching 12 years of age. What to do? You know that aged bourbons often sell at premium prices, there are those off palate drinkers (yours truly) that find something unique in many (but not all) older bourbons. So let us create a new bottle, and sell this bourbon, not to aficionados of aged bourbon, but to regular Beam drinkers who (status conscious) might want to step up when they have a bonus or small increase in income, and/or perceived status. What's to lose? We can either put that bourbon in small doses into Beam White (as we do now) or dilute it to the point of it being inoffensive, and sell it as a premium bourbon. If we lose in this game, we won't lose much and what we will learn is how much the market is open to marketing an inferior bourbon as a premium product.
Beam's answer is: 'Let's put out at 12 YO Beam Premium bourbon'.
Were I a strategist at Beam, and believed in my obligation to maximize Beam profits within the window of opportunity, I would support this strategy. Do all distilleries support such a strategy?.......... Well, I think that depends upon the foresight of the people who lead their strategy. And, that strategy is dependent upon the interests of producing superb bourbon only in the degree to which it is perceived as in the distiller's long term interest. To do otherwise is to risk market share. Something that only small producers, or well funded distillers, can afford to do (e.g. Chris Morris at Brown Foreman)........... without great risk to the enterprise.
My opinion is that Beam is trying to be only as innovative as it thinks is minimally necessary to stay in this risky game. They may be right, I do not know.