Monday, October 24, 2016

What Started It All. "Made and Bottled in Kentucky"

In his new book Bourbon, the Rise and Fall, and Rebirth of an American Whiskey, Fred Minnick generously credits some of my early bourbon work for ushering in the new era. For me, it all began with my independent production of the documentary, "Made and Bottled in Kentucky." The 25th anniversary of its premiere on Kentucky Educational Television arrives in June. What a long, strange trip it's been.

The one-hour documentary is still available on DVD, either directly from me or from Amazon.

"Made and Bottled in Kentucky" began in 1991 as a book idea. I had yet to write my first book at that point and I didn't know where to start. Most of my experience was in writing and producing videos. When the Kentucky Educational Television Network announced that it had money to fund independent productions on Kentucky subjects, in advance of the bicentennial of Kentucky statehood in 1992, I applied and received one of the first grants awarded. Additional support came from the Kentucky Distillers Association, from a grant it had received from the U. S. Department of Commerce for export promotion.

I began the project with visits to most of the working distilleries in Kentucky, strictly as a research phase. Principal photography took place in the second half of 1991 and first half of 1992. The deadline was June 20 and we were shooting until practically the last minute because we wanted to capture the exteriors in mid to late spring. The first exteriors at Maker's Mark in mid-April had to be carefully framed. The dogwoods were in bloom and the grass was green but the rest of the trees still looked pretty bare.

Our last shot was at the grave of Dr. James C. Crow in Versailles Cemetery. Earlier in the day we had picked up some Elijah Craig 12-year-old, which we passed around and drank straight from the bottle.

Obviously, the documentary looks dated after 25 years, but now that is part of its charm. A lot has happened since. With "Made and Bottled in Kentucky," you can see what bourbon-making looked and felt like in 1991-92, when we had no idea what was to come.

Many of the interview subjects are no longer with us: Booker Noe, Owsley Brown, Ova Haney, Elmer T. Lee, Walter Doerting, and Sam Cecil. Also featured (and still living): Bill Samuels Jr., Max Shapira, Jerry Dalton, Jimmy Russell, Flaget Nally, Dixie Hibbs, Ed Foote and others. All of the interview segments are longer than what you usually see in documentaries today. I was strongly influenced in my style by Donna Lawrence, a Louisville-based producer who didn't like narrators and wanted interview subjects to tell the story in their own words. For that reason, I didn't write the script until after everything was shot. I built the story from the interviews and augmented it with narration.

Making "Made and Bottled in Kentucky" was a great experience and it inspired me to keep studying Kentucky's bourbon culture. The rest, as they say, is history.

Sunday, October 23, 2016

Old Grand-Dad Discontinues 1.75 L Size

Old Grand-Dad Kentucky Straight Bourbon Whiskey is no longer available in the 1.75 L size. Discontinuing the 1.75 L is another strategy for stretching limited supplies of whiskey. Like Maker's Mark, a brand that briefly discontinued its 1.75 L a few years ago, Old Grand-Dad is a Beam Suntory product.

The goal is to keep a brand that is under supply pressure on the shelf, because available whiskey will go further in the smaller sizes. It is also possible that Old Grand-Dad, being a relatively small brand, was not selling enough in the jumbo size to justify its continued distribution. Most likely the decision was due to multiple factors.

Some people worry that the discontinuation of a size means the brand itself is in jeopardy. Nothing could be further from the truth. The brand is doing very well, despite a minimal marketing spend. That doesn't mean there won't be more changes. The brand's high proof expression, Old Grand-Dad 114, probably will be discontinued next year, Beam sources say.

Like Maker's Mark, Old Grand-Dad uses a different recipe from Jim Beam and other company brands such as Knob Creek, Booker's, Baker's, and Old Crow. Old Grand-Dad contains twice as much rye as Jim Beam (about 30%). Basil Hayden is the only other brand that uses Old Grand-Dad liquid and it too is growing.

A venerable old brand that originated in the 19th century, Old Grand-Dad is a good whiskey that is often not on the radar of many young bourbon drinkers. Especially with the growing popularity of straight rye, high rye bourbons such as Old Grand-Dad offer a unique taste profile. Bulleit and Four Roses are other examples of high rye bourbon.

NOTE: Information about Old Grand-Dad 114 was added on Monday, 10/24.

Thursday, October 6, 2016

Go West!

Jamieson and his fermenters.
There is a new distillery in Kentucky's far-western Fulton County. You've never heard of it, but you can read all about it in the new edition of The Bourbon Country Reader, the oldest publication in the world devoted exclusively to American whiskey.

Also in western Kentucky, the long distilling tradition of Owensboro has been revived. In this issue, the Reader explores that rich history.

In recent years, whiskey production has moved beyond Kentucky into virtually every state. We explore five craft distilleries in Illinois, Iowa, and Wisconsin in this Reader.

To experience The Bourbon Country Reader for yourself, you need to subscribe. Honoring tradition, The Bourbon Country Reader still comes to you exclusively on paper, in an envelope, via the USPS.

A subscription to The Bourbon Country Reader is still just $20 per year for addresses in the USA, $25 for everyone else. The Bourbon Country Reader is published six times a year, more-or-less, but your subscription always includes six issues no matter how long it takes.

Click here to subscribe with PayPal or any major credit card, or for more information. Click here for a free sample issue (in PDF format). Click here to open or download the free PDF document, "The Bourbon Country Reader Issue Contents in Chronological Order." (It's like an index.)

If you want to catch up on what you've missed, bound back issue volumes are available for $20 each, or three for $50.

If you prefer to pay by check, make it payable to Made and Bottled in Kentucky, and mail it to Made and Bottled in Kentucky, 3712 N. Broadway, PMB 298, Chicago, IL 60613-4198. Checks drawn on U.S. banks only, please.

Wednesday, September 28, 2016

Let's Demystify Label Age Statements

Everybody knows what age statements are, but many don't understand what age statements really mean. So, some facts about age statements.

For whiskey, in the U.S., an age statement is required if the whiskey is less than four years old. After four years age statements are voluntary. In Europe, an age statement is never required but a grain distillate must be aged at least three years to be called 'whiskey.' The U.S. has no minimum age requirement. It has the age statement requirement instead.

Although age statements are voluntary, they must be true. For the statement to be true, it must give the age of the youngest whiskey in the mix. Only if a product is single barrel or bottled-in-bond will it all be the same age.

In practice, an age-stated product will mostly contain whiskey at or just over the stated age, with a little bit of older whiskey, but you never know unless the distiller tells you. That too is voluntary and typically changes over time.

As a distillery's inventory changes, along with changes in sales and product mix, the age statement once seen as a marketing advantage can handcuff the producer, preventing it from using whiskey that has the right taste because it doesn't have the minimum calendar age.

Since most age statements are voluntary, they are used only when the brand feels an age statement will help sales without hamstringing the production side. When an age statement becomes too restrictive, it is changed or, more often, dropped. This is nothing new. Wild Turkey lost its 8-year-old age statement more than 20 years ago.

Knob Creek was created 25 years ago. It was very small at first and the industry was awash with aged whiskey due to overproduction in the 70s. The Small Batch Collection of which it was part was an experiment. No one knew if there was enough demand for super-premium bourbon. They were unknown, unproven, and needed every advantage they could get. All of the Small Batch brands had age statements.

Of the four, Knob Creek was the oldest, cheapest, and most successful. Today Knob is a substantial and well-established brand. With inventories tight industry-wide due to booming sales, the Knob age statement became expendable.

The use or non-use of an age statement is always a marketing decision. When most bourbon sold was barely 4-years-old and not age-stated, a few brands decided to go with a modest statement, like Very Old Barton at 6, or Evan Williams at 7, to differentiate themselves from the NAS (non-age stated) products in the same price segment.

That was easy to do 40-50 years ago. Today it's a problem. If you have an age-stated product and more demand for it than your inventory can support, you have three choices. (1) Keep the age statement and start allocating the brand, keeping your sales and profits flat. (2) Keep the age statement and raise the price enough to raise profits despite flat sales. (3) Lose the age statement, keep the price more-or-less the same, and increase profits by producing enough (using some younger whiskey) to meet growing demand.

In the old days, brand loyalty was all. Today many bourbonistas like to drink around but brand loyalty is still very important. Producers know from experience that most loyalists have a good taste memory. They know how their regular brand tastes and you tamper with that at your peril. A price increase is the second worst thing you can do. If a price increase is modest and there are no viable alternatives, people will accept a price increase. But if the flavor changes, the people who were your best customers will abandon you in droves. Lose the age statement and, while there may be some carping, sales won't be affected.

The reassuring thing is this. Since changing the flavor is the deadliest sin, the producer will do everything it can to keep the flavor the same. That is their highest priority. Their business depends on it. So it is preposterous to suppose that the disappearance of an age statement will mean an immediate or even long term debasement of the product. The truth is exactly the opposite. The age statement was sacrificed to protect the flavor.

Businesses, more even than humans, tend to be rational animals. They act in what they perceive to be the best interest of the business. You can count on it. When that interest coincides with your interest, you have nothing to worry about.

Monday, September 26, 2016

Whiskey's Biggest Lie

Their whiskey wasn't very good.
"Don't read the comments" is good advice more often than not. For what is to follow you might want to make an exception and read the comments on the Knob Creek post from last Thursday. Then again, it is not really necessary as they are, for the most part, wholly predictable. They range from resignation to outrage. "This is so unfair to the consumers and fans," "Flavor/Taste profile is a joke to justify keeping the same price using younger juice," "What happens to all the awards and medals that the real Knob Creek won?"

When producers make changes, many drinkers balk reflexively. Why are we so unwilling to accept change? Because those very producers have told us for years that change is bad.

Back in 2005, when the company now known as Beam Suntory (the makers of Knob Creek) created its first major TV advertising campaign for its flagship Jim Beam Bourbon, the theme was “true to our original recipe for 209 years.”

Bulleit Bourbon, a product created within the lifetime of any person of legal drinking age, purports to be made from an ancient recipe passed down to Tom Bulleit from his great-great-grandfather, Augustus. Mr. Bulleit blushes when asked about this story. Like the Beams, he has no parchment to show you, just a ‘tradition’ passed from father to son, and who can argue with that?

The problem with these and every other claim about an ancient, unchanged bourbon recipe is twofold. (1) Bourbon today is much better in every way than what they were drinking in 1795 or 1830, and (2) the claims are untrue, because whiskeys, like most products, are constantly changing.

Even 100 years ago, mashbills were pretty flexible. (In a multi-grain whiskey, the 'mashbill' describes what grains are used and in what proportions.) Ingredients varied based on cost and availability. Products were often made by combining whiskeys made from different recipes at different distilleries. Today there is much more consistency, but there are still variations. Different batches of grain can vary in significant ways. Changes to the stills make a difference. When energy is costly, distilleries will run a thicker mash to reduce energy costs. Wood characteristics vary from tree to tree. Every difference, however small, makes a difference.

Because there are so many variables producers don't rely on recipes, they rely on taste. Every distillery has a library of bottles that record in liquid form how different batches have tasted over the years. Every producer has a panel of tasters whose job is to compare each new batch to the standard for that product. If the new batch doesn't measure up adjustments are made, generally by adding whiskey that possesses the missing characteristic. They are limited in this effort by labeling rules. If a product is age-stated, '9-years-old' for example, no whiskey may be used that is less than 9-years-old even if the profile calls for it.

Virtually all whiskey producers strive for consistency, as do most manufacturers regardless of the product. At the same time there is a seemingly-contradictory impulse to constant improvement. This varies with product type. Technology products have to improve or die. With other products, such as whiskey, long-term consistency seems the higher value.

Twenty to thirty years ago, when America was awash with whiskey no one wanted, many producers routinely put 8- to 10-year-old whiskey into their standard NAS products. They didn't publicize it because they knew it was temporary and no law required disclosure. There were few complaints.

Today, rapid demand growth has outstripped the industry's supply side. Because whiskey has to be aged, you inevitably over-produce or under-produce. It is almost impossible to get it just right. The challenge today is to meet as much demand as you can with the inventory you have, and to do it as profitably as possible.

Because of the demand growth, everyone today is distilling as much whiskey as they can as fast as they can. All indicators say bourbon sales will continue to grow for years to come. All indicators have been wrong before. Nothing is certain.

Marketers of all kinds know a lot about consumer behavior. With whiskey, there are two sure ways to piss off your most loyal customers, raise the price or change the taste, and between those two changing the taste is worse. Everything else, including label changes, has a lower priority.

So producers will continue to like the "nothing changes" claim, but what you should hear is "we're doing everything we can to keep everything you care about the same." That may not be snappy, but it has the virtue of being true.

Thursday, September 22, 2016

Another One Bites the Dust

Say goodbye to the Knob Creek age statement. Labels without it could start to appear next week. "We have good inventories but with the growth we’re seeing, we are going to take the age statement off so we can keep the taste profile the same," says Beam Master Distiller Fred Noe. At first the whiskey will not change at all, as there is enough 9-year-old Knob in the pipeline for the time being, but with the growth they're seeing it was either drop the age statement or go into heavy allocation.

This can work because Knob actually finds itself with an over-abundance of whiskey more than 9-years old that will mix well with younger Knob to keep the profile the same. Based on inventory already in the pipeline, they will be able to grow the brand and maintain the profile but only if they are not bound by the age statement. Something had to give.

Older doesn't balance younger with any kind of mathematical precision. You don't get a 9-year-old flavor by mixing half 10-year-old with half 8-year-old, but that is a shorthand way to describe the process. More and more large distilleries are doing this, as they find themselves with various quantities of whiskey across a large and widening age range.

The age statement change only affects the standard Knob Creek expression. The Single Barrel Reserve will continue to have an age statement and the rye, which never had one, will continue unchanged. Nothing else is changing.

Inventory tightness also makes future 'special' Knob releases, like the vintage-dated 2001 expression in distribution now, unlikely.

No one likes to see an age statement go away, but it is part of the times in which we live. Beam has both the inventory and the expertise to keep making whiskey with the same flavor profile in ever larger quantities indefinitely. That is the goal, anyway.

To Knob fans, Noe makes this pledge. "I will taste every batch. It won’t be Knob Creek unless I say it’s Knob Creek.”

You might want to set aside an age-stated bottle just to see how well he does.

Wednesday, September 21, 2016

It's Just Whiskey

The Donnington Priory location of Dreweatts.
Dreweatts, a London auction house, is holding a rare 'wine, whisky, and select spirits' auction on Wednesday, October 12, 2016 at 10 AM (London time). The only American whiskey on offer is A. H. Hirsch 16 year old Reserve (gold foil), two bottles. Dreweatts estimates their value at £900-1,000 each ($1,170-$1,300).

It is rare that we get a glimpse of the actual market for such 'unicorns.' In the United States, it is illegal to sell alcohol without a license so virtually the entire secondary market is underground. No one knows how big it is and there is no reliable record of prices paid. Two bottles in a distant auction do not a market make, but it's something.

At this point, the selling price for A. H. Hirsch, Van Winkle, George T. Stagg, and select others has nothing to do with their quality or drinkability. It is based entirely on the economics of scarcity and the willingness of some monied folk to spend outrageous sums to obtain something book writers say they can't have. It is much like the old joke about why dogs lick their own balls.

Because they can.

Speaking as someone who is neither wealthy nor especially limber, but who has tasted most of the rarities, you should not feel too badly if you haven't. All of these extremely desirable whiskeys are good whiskeys, but are they 40-times better than a lot of everyday pops? Not really. It's just whiskey. You're mostly paying for the ego trip.

Incidentally, most of the 80 lots are single malt scotch, many in the £100-120 range ($130-155). Bidding is online but I have no idea if residents of the USA can participate.