North American Whiskies

When
addressing the topic of domestic American whiskies in years
gone by, there were many separate distinctions to
make.

First, there were the
numerous staple blends, then rye whiskies, then a bourbon
category, then a separate Tennessee whiskey section. And
always, in the background, were those massively-distributed
volume products from our neighbor to the North, which, once
upon a time, were among the most popular calls in every bar
in America. These, of course, were the great army of
Canadian whiskies, which for so many years were the
universal, light and approachable brown goods standard of
choice for most bartenders and on-premise consumers
throughout the land. Surely, you remember
Canadian-and-ginger, Canadian Sours, Old-fashioneds,
Canadian Manhattans, Seagram’s VO and water or on-the-rocks,
Seagram’s 7 Crown and 7-Up highballs. Whatever it was, the
pour was likely to be something out of a Canadian whiskey
bottle.

But times have been
a-changing in the on- and off-premise US marketplace.
Bourbon and Tennessee products are now both lumped into a
powerful, exploding, brand-loaded spirits category called
American Straights, while the Canadians, although still
significant players, have been experiencing some sharp
declines in the past decade. But Seagram’s brands have now
been acquired by Diageo, who have been pumping unprecedented
amounts of advertising investment behind the Canadian brands
(nearly 23 million dollar ad spends each of the last two
years). And what’s been happening, recently, is that a new
brown goods super-category seems to be emerging, forcing us
to take a combined look at both American and Canadian
whiskies, together, and evaluate their performances,
side-by-side. So, for the first time, in my annual whiskey
category report, I’ve enlisted the expertise of four
especially well-informed whiskey-knowledgable distributors
to assess the entire spectrum of North American whiskies,
which can provide us with a comprehensively big picture and
educate us about notable brand performances and consumer
trends, while providing some new perspectives on this
growing and ever-changing domestic whiskey market in our
home state.

---

JIM
SEELY
VICE
PRESIDENT-UNITED DIVISION
UNITED LIQUORS, LTD.

ROBERT
BRADFORD How would
you evaluate the various strengths and appeals of the
diverse and impressive variety of North American Canadian
and American Straight whiskies in the United Liquors
portfolio?
JIM
SEELY The
Canadian-bottled biggies, Crown Royal and Seagram’s VO, are
with our Century Division which was recently created to
distribute our new Diageo brand portfolio. The primary
Canadian whiskey my United Division handles in the
Massachusetts market is US-bottled Black Velvet and Black
Velvet Reserve. This kind of brand represents steady
business for us, and is more concentrated in the western
part of the state. I think of it as more of a rural brand,
almost. It’s not a glamor performer, but it’s been holding
its own for us, and, in fact, is up about 3% this year,
which is pretty decent when you consider it’s a fairly
good-sized base product with a national volume sales of
nearly two million cases. Right now, we’re doing over 1O,OOO
cases with it.

I tend to look at the
Canadian whiskey category as having a core loyal following
of people who have found a brand and stayed with it. For a
number of brands, it’s a franchise that’s not going to
fluctuate too much one way or the other. And it’s not
particularly sexy for younger drinkers. There’s actually
nothing especially new or exciting about most of this
category, until you hit Crown Royal, which is both an
anomaly in its own category and a marketing phenomenon in
the entire spirits industry. It attracts all kinds of newer
younger consumers because it’s a brand’s brand, whereas
something like a Black Velvet is not a real growth brand and
is probably being sustained by an established core of steady
loyal customers, remaining fairly even from a sales
standpoint. But make no mistake about it. The volume sales
of Canadian whiskey is still a very viable part of this
business.

American Straights are a
different story. It’s a category that’s really started to
take off. We’re handling all Future Brands’ Jim Beam small
batch bourbon labels. We’ve also got the Wild Turkey lineup.
Overall, this category for us has been a very strong
performer the past couple of years, and we’re seeing a real
interest revival among younger target consumers. One good
reason is that this is a category with three very strong
brands, what with Jim Beam, Wild Turkey and, of course,
Tennessee’s Jack Daniel’s leading the charge. And they’ve
all been making their advertising images and messages a lot
more appealing to entry level consumers. A lot of ads
previously were much more about nostalgia and scenics. Now,
messages have much more to do with relevant lifestyle images
that younger consumers can aspire to and identify with. This
has prompted a lot of trial for American straight whiskies
by drinkers who might not otherwise have been much attracted
to the category. But once it came on their radar scope as
something they liked and could experiment with, a
significant new interest and fan following has
developed.

In bars and restaurants,
I’m also seeing women ordering more drinks like Beam and
cola, as well as other whiskies, more than ever before. In
the past, it was often assumed that whiskies were not a
women’s taste thing, but this is far from the truth today.
And consider the bourbon-style whiskey taste profile. It’s a
bit sweeter and more approachable as a whiskey, and
definitely more user-friendly and mixable than scotch,
particularly for a first time trial.

And for an increasing
number of consumers who’ve already been introduced to
American straights, there’s a distinct developing interest
with the higher-end brands at the super-premium levels. So,
small batch bourbons like Knob Creek 9-year-old, at
1OO-proof, Baker’s 7-year-old, 1O7-proof, Old Grand Dad
114-proof Special Selection, Wild Turkey’s 1O8.4-proof Rare
Breed, the 1O1-proof Kentucky Spirit and Russell Reserve
1O-year-old whiskies, not to mention the high-end of the
Jack D. family, these have helped make the American Straight
category sexier just as single malts have done for scotch.
Now, suddenly, a newer, younger bourbon drinker is saying,
“Well, maybe I’m not quite ready, yet, but this turns out to
be a really fun category to fool around with and move up
in.” And getting acquainted with these higher-than-premium
brand levels actually is becoming more and more aspirational
for the younger drinking crowd.

Another somewhat unique
fascination this category has at the higher levels is a
broad range of proof and age statements among the various
brand families. It’s somewhat similar to what you see with
specialty single malt scotches, and this presents a very
exciting variety of tasting experiences, aside from just an
upscale prestigious whiskey brand image. And aside from
different proof strengths, this is also a category loaded
with highly distinctive personalities and products that bear
the names of specific master distillers, like Baker’s,
Booker’s, Basil Hayden’s, Russell’s Reserve. More than any
other category, you can’t talk about bourbon without
focusing on the characters and people behind it, and so many
of these fabulous individual talents that have produced the
brands. In fact, this is probably why good bourbons have so
many different proof strengths, as opposed to other
categories and brands. It’s because there are so many
creative individuals with distinctively different tastes and
proof-strength signatures and different interpretations of
what a good bourbon should be that this has become one of
the most fascinating categories to explore. Anyway, these
producers are all real life people and real legends of
master craftsmanship that have the ability to make a very
personal kind of connection with consumers and establish a
special kind of bonding with a brand.

RB
What’s been doing particularly well for you?
JS
The success we’ve been enjoying with the Beam small batch
collection of bourbons, including Knob Creek, Baker’s, Basil
Hayden’s, Booker’s has been outstanding. Market growth here
in Massachusetts has been dramatic. We’re talking about
double-digit increases for seven years in a row, now, and
over 2O% the last three years. We’re also up 6% on regular
Beam white label, as well, which has been growing the last
three or four years. And the volume of Beam Black Label has
actually doubled over the last 12 months. The Wild Turkey
family, that includes the flagship 1O1 bourbon, the super-
and ultra-premium Rare Breed 1O8.4 barrel-proof and Kentucky
Spirit labels, and the signature Russell’s Reserve 1O1-proof
1O-year-old, has also been performing well for us. They’ve
been developing a very loyal following all their
own.

Traditionally, of course,
Massachusetts has never been considered one of the
heavyweight bourbon consumer markets, like California,
Texas, and Florida, but it does seem to be becoming a more
popular and sophisticated American product of choice around
here which entry level customers are discovering as never
before. As I said, once the companies made it appealing to
this young entry consumer level with aspirational lifestyle
advertising, and created an incentive for trial tasting,
this consumer segment has found various products to be
mixable and drinkable, and been sticking with these
brands.

RB
What particular initiatives are you using to grow the
bourbon market in the Massachusetts?
JS
In the past, our higher end American straight whiskey
portfolio had been strategically and selectively placed in
distribution. Now we have come to realize it should be
everywhere. There’s simply developed a greater higher-end
brand appeal and demand that we’re seeing today, where we
need to go out and make sure that these products are in
every bar and restaurant. Because, like I said, all our
brand owners have been making major advertising investments
lately that has created a heightened level of product
awareness. Beam’s advertising, for example, is now more
directly focused on the stuff inside the bottle. Wild Turkey
images used to be all about Kentucky scenes, but now they’re
all lifestyle oriented. This opens up a brand’s appeal for
everyone, and our goals are to make sure that the primary
labels and all these line extensions have a good exposure in
all our accounts.

To summarize what I’ve seen
happening in the Massachusetts bourbon market, the whole
category has become just so much more brand-driven, and
we’re putting most of our emphasis on these growth brands.
Beam and Wild Turkey are certainly leading the way, but all
brands are entering into an age of discovery, right now,
that’s unprecedented. The distinctive variety of products
out there, today, has created an explosion of interest in
the category never seen before.We’re seeing it beginning to
happen in this state, just as it’s been happening throughout
America, and in markets all around the globe. And I’d have
to say that future opportunities for higher-end bourbons has
never looked more promising.

---

KEN
MacDONALD
SALES
MANAGER
ATLANTIC IMPORTING COMPANY, INC.

ROBERT
BRADFORD In the
American Straights, and also the Canadian whiskey
categories, you have a couple of true specialty niche brands
of exceptional quality and connoisseurship interest. Three
of the brands are rare older American whiskies, including
the tiny Bardstown-based McLain & Kyne’s Jefferson’s
Reserve 15-year-old, 9O.2-proof, that retails around $49.99,
and which many aficionados contend is among the finest
bourbons they’ve ever tasted. You also have their
Jefferson’s 8-year-old counterpart at a lower 88-proof and
pricepoint level of about $25, plus their very small batch
label called Sam Houston. You also carry the Old Rip Van
Winkle family of small batch bourbons and rye whiskies, aged
up to 2O years with varying proof strengths, as well as an
extreme 16-year-old rarity from the now-silent A.H. Hirsch
distillery in Lawrenceburg, Kentucky. And from Canada,
you’re now distributing a new 1O-year-old Canadian
super-premium reserve in the US market called Pendleton
that’s been drawing some highly complimentary media
attention. So, let’s talk a little about what you see going
on in the marketplace for North American whiskies of this
quality, and what kind of opportunities are out there for
your particular whiskey selections.
KEN
MacDONALD We’ve
recently moved into a new 5O,OOO warehouse facility on the
Framingham-Natick line, which is completely climate
controlled and can hold a vastly larger inventory of
category stocks than we’ve ever had to work with before. We
felt we didn’t have any choice but to grow along with all
the expansions that have been going on in the industry, and
this gives us so many new opportunities. Previously, we had
to be overly careful and cautious about anything we ordered
because we just didn’t have the storage space for products
that we needed. This has all now changed. We’ve been able to
increase our distribution capabilities considerably and
greatly enlarge our inventory of choice specialty products
like these whiskies. And we’ve put a lot more sales people
out there in the field, today, and become much better
positioned to really tune in with a wider variety of quality
accounts.

In particular, these
limited supply whiskies have been doing very well for us, so
far, just as sales of the higher-priced brands in most
spirits categories have been steadily increasing. Whether
you’re talking about single malt scotch, high-end vodkas,
specialty gins, and so on, it seems that the same thing is
happening with American Straights, and even with Canadian
Reserves. People are discovering the higher marques, moving
up and around in these categories more than ever. When it
comes to bourbons, you’ll hear some people suggesting that
some of the attraction is to a patriotic,
produced-in-good-old-USA product image. But the real trend
and attraction we see in our own business is towards these
hand-crafted, higher-priced quality items that define the
best that this category has to offer. This is the truly
significant point – it’s all about the fact that there’s a
growing demand for sophisticated high premium whiskies, even
when overall sales of the total whiskey category itself may
be trending down.

I can only tell you that
top bottle shop retailers and boutique outlets, like Lenny
Rothenberg’s Federal Wine & Spirits, are all over this
high-end stuff, especially with something like our very
limited A.H. Hirsch whiskey, which has been receiving a
number of gold medal category awards like the 2OO4 Bourbon
Gold from Beverage Tasting Institute only a few months ago.
It was also Malt Advocate’s Whiskey of the Year in 1999. It
was made by A.H. Hirsch Distillery in Kentucky, which,
before it closed down in 198O, was the oldest licensed
distillery in America. We just love it when we can find
items with this kind of genuine historic significance in any
category. What’s particularly attractive about products like
these is that they are all about prestige. Today’s consumers
not only want to drink better, but they also want to drink
and serve their guests something with a true historic story
behind it.

RB
In recent years, I’ve written extensively in this
publication about the celebrated two-centuries-old heritage
of the American Straight whiskey culture, and profiles of
great icons of bourbon and Tennessee whiskey’s exceptionally
colorful master distillers fraternity. But I’m not at all
familiar with your A.H. Hirsch brand. What exactly is it and
what are some of your distribution objectives?
KM
This particular
bourbon was produced in 1974 and represents the last of the
rare aged pot-still bourbons the US has produced, as well as
the oldest pot-still bourbon still available in the American
marketplace. The only way to describe it is that it’s a
classic. It’s a 9l.6-proof 16-year-old and has to be
regarded as a genuine ultra-premium luxury. We wholesale it
at about $5O, which actually is a very modest pricepoint for
something with this quality level, and you’ll find it on
retail shelves at anywhere from $6O-something on up. I
should point out that this isn’t going to be around for any
great length of time. From a national perspective, there’s
not a whole lot left. But we’ve got a significant supply
still on hand here for the Massachusetts market which should
last us for the near future.

As far as distribution
goes, these whiskey specialties started mainly as
off-premise items for a connoisseur-level audience. But more
recently, we’ve been able to penetrate some of the high-end
on-premise Boston market with a new on-premise specialty
salesman who recently joined our team. So, you’re now seeing
Hirsch and other of these limited ultra-premium whiskies in
upscale bars and restaurants like No. 9 Park. Slowly, but
surely, you’re going to be finding more and more of this
stuff on the drink lists of many select on-premise
establishments. Another particular thing that I think has
helped develop our sales substantially is the internet. A
lot of people are logging onto our website just to browse,
and they’ll discover something like a Hirsch, which they
probably had never seen, tasted, or even heard of
before.

---

JIM
HICKEY
VICE
PRESIDENT-CENTURY DIVISION
UNITED LIQUORS LTD.

ROBERT
BRADFORD One of the
prize Diageo brands that United picked up in that recent
brand trade with Horizon was the Canadian whiskey giant
Crown Royal, along with Seagram’s VO and some other
Seagram’s products. How has Crown been working out for you,
as well as other North American whiskies in your United
Liquors new Century Division portfolio?
JIM
HICKEY The real
Canadian growth story in this Massachusetts marketplace, as
with the rest of the country, has to center on Crown Royal.
This is where the action is in the super-premium price
segment of the category. We got the brand almost two years
ago and have been doing double digits with it both years.
And an upcoming offshoot of this brand is Crown’s more
expensive Special Reserve whiskey, which, from a
distribution and take away standpoint, may not be driving
the train, but it does contribute to price protection,
imagery for the brand, and is doing a very solid sales
business of its own. Feature pricing for a Crown 75Oml is
around $2O. Special Reserve retails in the $3O to $35 range.
This presents an excellent and affordable opportunity for a
great many loyal established Crown consumers to step up
within the Crown family.

The differences here are
very noticeable. Reserve is aged longer and has a far more
robust style and taste profile. Crown regular is almost
sweet and on the lighter side, although not as light as the
Seagram’s VO style. But Crown Reserve is distinctly oakier
with a fuller-bodied taste and texture, making it ideal for
something like a Manhattan. Regular Crown is more suited to
on-the-rocks, highballs and Crown-and-cola type
drinks.

RB
It’s always seemed that Crown not only defies any of the
flat to negative trends we see in the Canadian category, but
that it also has almost established a whiskey category all
its own.
JH
Absolutely right. To give you an idea of how important Crown
Royal is as a brand, just consider its national stature.
It’s not only the #1 Canadian in the US, but also is the #8
volume brand. Even more significantly, it’s the #3
profit-maker, nationally, which all adds up to a huge amount
of dollars contributing to our distribution network. And
it’s a brand that’s growing against the target consumer
demographic which is really 25-plus. So, for consumers
coming into the brand it’s got a lot of staying power and
really some phenomenal growth potential on the come. We’re
also seeing, in a lot of on-premise promotions, that a lot
of women are trying Crown Royal as their first venture into
any whiskey category. Ten years ago, you just wouldn’t be
seeing this kind of thing.

We’re not anywhere near a
top market for the brand like Texas, where Crown sells
3OO,OOO annual cases and is the #1 selling spirit.
Crown-and-Coke is the #1 call drink down there. In fact, I
think almost every freezer in Texas must have a bottle of
Crown Royal tucked in somewhere. So, we have a long way to
go. But, to give you some idea of the potential Diageo sees
in this brand for our Massachusetts marketplace, they’re now
investing a two million dollar ad spend on the brand just in
this state for this year. And this is off a volume sales
base of only 23,OOO cases, which shows you what kind of
faith and huge commitment they’re putting behind this brand
for the immediate future. We share this same kind of
enthusiasm about where we can go with it around
here.

RB
What about that tried-and-true staple whiskey, Seagram’s 7
Crown and Seagram’s VO, which is also a major
Canadian-bottled whiskey and currently the #3 leader in the
US category with slightly under a 1.3 million volume case
sale. I’ve noticed it slipping on the charts for quite a few
years, now, along with a similar decline of #2 Canadian
Club. But can you see any positive coat-tail effect on VO
sales coming from Crown Royal success.
JH
Truthfully, VO is not anything I see experiencing any
dramatic growth in the foreseeable future. And the same goes
for the Seagram’s 7 Crown whiskey blend. Business has been
flat to down as much as 3% the last four or five years. But
there have been Seven-and-Seven drinkers around forever, and
there is certainly still a lot of volume consumption of both
brands. Consider that both brands are doing over 5O,OOO
cases in this state and represent over $5 million in sales,
so there’s definitely consumer need to have that larger
bottle at home, which is value for the money that they’re
paying, whether it’s Seven or VO. So, whether it’s the VO
and water highballer or a Seven-and-Seven consumer, these
are still important blended whiskey staples for home
consumption.

RB
How would you summarize your outlook for the future of these
brown goods in the Massachusetts market?
JH
Price and imagery will continue to be driving forces, and
brown goods will succeed in those appropriately positioned
price segments. Imagery doesn’t stop just on white spirits
by any means. When you put a price tag on a super-premium
fine bottle of North American whiskey, you’re still going to
get consumers coming to it and trying it, and some consumer
demographics may change – like the gaining of a larger share
of the female audience we were talking about.

But, again, this is what
makes Crown Royal so special, as well as a role model for
brown goods success. It’s an imagery-driven brand that’s
both well-priced and perfectly-positioned You see a number
of good examples in the American Straights category, as
well. But Crown just stands out on its own. You see it in
the Hispanic market, which actually has about 22 segments
and is very complex, and also in the African-American
market, which are both very image-conscious audiences. Crown
fits right into these ethnic franchises, and is really
starting to catch the bus. It also has attracted a strong
following in our local Asian markets. These are all growing
and very diverse groups, who are very caught up with what
they drink and how it makes them look.

RB
Before we leave the Crown Royal subject, I’m curious as to
how on-premise reception compares to off-premise sales.
JH
Our 12-month trend by channel is phenomenal. On 12-month
cases, Crown Royal, in the state of Massachusetts, has grown
37%, growing 52% on-premise and 31% off-premise. That’s
going crazy in this business. And, on a given month, we’re
selling Crown Royal to 18OO accounts, which is also a pretty
extraordinary statistic. To give you another way to look at
this success, consider that in the last 18 months, the brand
has grown by nearly 4O% on accounts sold. This means more
and more consumers out there trying the brand and all kinds
of accounts are reordering. And this was never supposedly
considered a strong Canadian whiskey market. But what this
shows is the impact of Diageo’s advertising investment.
They’re truly getting a lot of bang for their bucks,
speaking to consumers with the kind of advertising they’ve
committed to. It’s the right brand, the right liquid, the
right package, and consumers are responding with
unprecedented enthusiasm.

Of course, both Crown
regular and Crown Reserve bottles come in that famous purple
pouch, and, here again, the brand marketers have been able
to build all kinds of consumer excitement. For instance,
there’s on-going consumer feedback contests about all the
sometimes fantastic different ways people use this purple
pouch. Some are almost unbelievable examples like sidebags
on motorcycles and people making wedding dresses out of
these purple bags. People have used them to make shirts,
jackets and aprons. And there’s a special breed of consumer
that’s really gotten hooked into what is now called the
Crown Royal Nation, with things like membership in the
Society of the Crown, and all kinds of other promotional
stuff they highlight on Crown Royal’s website pages that are
just loaded with all this cult-like fan activity.

Right now, one of the
toughest on-premise venues to get into, here in
Massachusetts, is the Crown Royal Club, which is on
Brookline Avenue at Fenway Park. It’s like a hospitality
suite, featuring Crown Royal and a couple of other Diageo
brands. But the high imagery and signage, facing the street,
is all about Crown Royal. You need a special pass to get in,
and it’s open to the 3OO exclusive dugout seat holders.
People like retired General Electric CEO Jack Welch are
regulars, along with many other high profile patrons, and
it’s all the buzz at Fenway with a lot of TV exposure. Same
thing with Fleet Center activities with the Boston Bruins
and the Celtics. We’re talking image, image, image for the
Crown Royal brand, as opposed to pumping up the image for
the Canadian whiskey category in general. It’s all about
brand image marketing.

One point about this Crown
Royal phenomenon I find particularly interesting. The fact
is, there’s really no identity that it’s a Canadian whiskey
at all. I mean, you go into a market like Texas and it’s
simply just Crown Royal whiskey, period. Down south,
whiskies are mainly identified as bourbons. Crown is Crown.
The brand even shows up on a lot of drink menus, listed near
the top of the bourbon section. Sort of unbelievable brand
success, wouldn’t you say? It’s something like the
Captain-and-Coke call-drink success that Captain Morgan has
achieved. Does anyone really think of it as Puerto Rican
spiced rum with cola? I don’t think so. And, frankly, based
on our communications with consumers around here, there’s no
emphasis on or identification with Canadian whiskey as far
as Crown is concerned. Everything’s based on how consumers
look and feel, and what they’re spending on it. So, we’re
talking almost entirely about a brand-driven consumer base
here, which has hardly any relationship with the Canadian
category. Ultimately, it’s all about “I really love drinking
Crown Royal,” which has very little over-ride into “I love
drinking Canadians.”

---

BOB
EPSTEIN
PRESIDENT
HORIZON BEVERAGE COMPANY

ROBERT
BRADFORD In the
major transfer of products and brand realignments that took
place between you and United Liquors here in Massachusetts
about two years ago, you got prize brands like Grey Goose
vodka, but had to give up top Seagram’s brands like Crown
Royal, VO, along with other stuff. How do you now view the
loss of this Seagram’s Canadian whiskey portfolio, and what
are your feelings about the Canadian category in
general?
BOB
EPSTEIN Well, we’re
still quite involved with Canadians with major brands like
#2 foreign-bottled volume leader Canadian Club, which is
close to a 1.4 million-case brand, nationally, and been
showing some recent growth. We also have the #1 US-bottled
Canadian volume leader, Brown-Forman’s Canadian Mist, which
does over 2 million cases in the US. And we’ve just taken on
a new super-premium foreign-bottled Canadian, Forty Creek,
owned by the very dynamic Shaw-Ross import group. It was
launched in the US market last year, and it’s considered a
great whiskey and been getting some very good
notices.

So, for us, the Canadian
category still represents a substantial chunk of business in
this Massachusetts market, and after several years of
overall declines, it seems to be turning around in the last
two or three years. Both Canadian Club and VO have long been
the two category stalwarts here in this state. Crown Royal
was and is certainly a very presitigious brand with a great
history. And no doubt it represents a significant loss for
us, because it’s a very high profit brand.

Canadian whiskey is still a
very viable and profitable category. However, the true
bright spot, if you want to talk about North American
whiskies is the boom going on with American Straights. This
is where you’re seeing all kinds of opportunities and
excitement.

RB
This is, of course, a huge branded-part of Horizon’s
portfolio, starting with the whole mega-brand Jack Daniel’s
Tennessee whiskey lineup, major bourbon growth brands like
super-premium Maker’s Mark and Woodford Reserve, as well as
Jim Beam’s White and Black labels, big volume staples like
Early Times, established bonded 1OO-proof labels like Old
Forester and Old Grand-Dad, superb ultra-premium specialties
like the Elmer T. Lee 9O-proof, Blanton’s Single Barrel,
Weller 19-year-old, to mention just a few. How would you
evaluate all that you’ve got?
BE
Jack Daniel’s is obviously the king of kings in any whiskey
portfolio. Where do you begin or end when you start talking
about Juggernaut Jack? It’s a four-plus million case brand
family in the US, and does over six million cases worldwide.
It’s the big big diesel engine pulling the American
Straights category train. It’s one of the few brands of any
commodity that transcends generations. Your grandfather can
drink it, your father can drink it, your grandchildren can
drink it, all at the same time, whether they’re wearing ties
and business suits or have tattoos, are wearing earrings and
driving Harley Davidson motorcycles. I can’t think of any
other spirit that really has this kind of franchise or has
achieved this level of icon stature. The remarkable job that
Brown-Forman has done with marketing and handling the brand
is second to none. And with the different line extension
whiskies that are now part of the Jack Daniel’s brand
family, like Gentleman Jack, and the 94-proof Single Barrel,
the success story just keeps developing all the time. The
imagery supporting this brand is simply extraordinary. I
mean, we keep getting calls all the time from kids in
college wanting Jack Daniel’s banners for decorations in
their rooms. They want anything that has Jack Daniel’s on
it. And these are kids, already thinking about Jack, before
they’re even 21. What do you think they’ll want to start
drinking at the LDA level?

But what I see happening
elsewhere in this category, that’s been spreading more and
more into this New England marketplace, are these consumer
segments developing into very loyal brand followings. For
instance, there was a time where we were selling four or
five cases of Maker’s Mark in a month. Now, it’s one of our
more important bourbon brands on- and off-premise. It shows
what can happen when you have a brand that’s the real deal.
With Maker’s Mark, what you see is what you get. All those
bottles really are hand-dipped. It’s a 9O-proof hand-crafted
bourbon. It’s got the most energetic, colorful, and shrewd
brand spokesman in Bill Samuels, who has built a nationwide
cult-consumer following for his family’s whiskey. Both he
and Allied Domecq have just done a superlative job nurturing
this brand to great heights. And much to Allied’s credit,
they’ve continued to let Bill Samuels keep on doing his
thing. We’re doing in excess of 1O,OOO cases with it, right
now, and, although it’s not a big volume item for us, it
certainly is one of the great products in our portfolio in
terms of prestige and quality. All you can say is that Bill
Samuels is one of the unforgettable characters in this
industry. Anyone who believes in his whiskey, he adopts. He
adopted us a long time ago, and we’ve been growing the brand
ever since.

The people at Jim Beam have
also been doing a terrific job, lately, spending a lot of
money, and especially developing their Black Label. Woodford
Reserve is another bourbon product with great potential.
It’s been showing tremendous growth on a small base, and
Brown-Forman has high expectations for this brand down the
road. It’s another example of a high quality product that
makes this category so unquestionably viable
today.

RB
Would you consider Massachusetts to be a bourbon-friendly
marketplace?
BE
Not historically. Traditionally, we’ve never been perceived
as a bourbon market. Way back, when someone ordered whiskey,
it would most usually be something like a rye and ginger
call, and the pour would likely be a Canadian Club, a VO or
Seven Crown. However, the amusing thing is that this wasn’t
really a rye whiskey, and the fact is, I don’t believe
there’s ever been any kind of real rye whiskey category in
Massachusetts at all. Anyway, in years past, bourbon,
itself, has always played second fiddle to US-domestic
Canadian and bottled-in-Canada whiskey imports. But that’s
changing, today. Go into any bar and restaurant and take a
good look. American straights have a much bigger share of
the brown goods business. And, now, there’s quite a bit of
female action on it, too, strange as it might seem. But
maybe this is not so strange, when you think about it.
Bourbons have a distinct point of difference and these
brands have sweeter approachable whiskey tastes. It’s not so
surprising that this type of spirit would appeal to a lot of
ladies out there, starting with Jack D that already has a
sizeable international female audience. No question that a
lot of the consumption is with cola. But there’s also a
comeback of bourbon drinking with water or just neat with
the higher quality products.

I’d finally have to say
that American Straights are showing more vibrancy, in
general, than they’ve seen in years, and perhaps more than
ever before. They’ve been receiving some very encouraging
responses from this new generation of consumers, which is
something I think the scotch people could take a good lesson
from. Because what these American whiskies are now doing is
reinventing and capturing a real enthusiasm for this
category, building momentum, increasing exposure for their
products. We’re anticipating some very profitable years
ahead.