Bourbon Empire (27 page)

The task of determining a company’s true craft bona fides
is also inhibited by the fact that the term “craft” has no definition. The expression is unregulated and can be used by marketers however they see fit. Since most consumers instinctively think of products bearing a “craft” label as handmade, locally produced goods where supposedly better quality justifies a higher price, this means companies freely use the term as a marketing tool. Smallness (intimate, personal, Jeffersonian) will forever hold an appeal that bigness (distant, impersonal, Hamiltonian) does not. While announcing a new line of whiskey at an investor meeting in 2013, Larry Schwartz, president of Diageo North America, which is part of the world’s biggest spirits producer, said, “We’re going to be the number one craft distiller in North American whiskey in the U.S.”

Schwartz’s statement confirmed that the term “craft” is little more than an ambiguous buzzword. Diageo makes fine whiskies, but its status as the world’s biggest maker of whiskey almost certainly contradicts most people’s interpretation of “craft.” The American Distilling Institute,
the trade organization that represents America’s smallest distillers, has attempted to put boundaries around the term by defining it as producing less than one hundred thousand proof gallons per year. This definition, however, is equally meaningless, because it pegs the term to size and not quality. Many small companies make horrible whiskey and many big companies make excellent whiskey, leaving consumers in the lurch if they want to use “craft” as a measure of quality. (Instead of defining “craft,” a transparency rating would be more helpful. Higher scores would go to outfits that divulge technical information, such as production methods. This way, customers could form their own evaluations using hard data rather than marketing jargon.)

And while small, tailored operations hold unique advantages for many endeavors, we forget that some industries benefit from bigness. Take the car company Cadillac, which in the 1930s billed its cars as hand-built luxury goods—these “craft” cars were expensive and notorious for needing constant repairs. It took General Motors engineer Nicholas Dreystadt to drop cost and improve quality by implementing production standards and economies of scale utilized by other auto manufacturers. In this case, the benefits of mass production and scale were clear, but the argument for them rarely transfers to food—homemade jams, pickles, and cheese are almost always better. Made in small quantities, with a close eye and control over quality and ingredients, small wins almost every time.

But whiskey stands apart from other foods in that it sometimes contradicts the rule that size matters. The size of a still, big or small, pot or column, has far less impact on a whiskey’s quality than the skill and know-how of the distiller operating it. In terms of aging, holding enormous volumes of spirits is another distinct advantage. Since every barrel matures a little differently, having a vast palette of barrels to mingle together to achieve brand consistency is another undeniable asset, and one that small distilleries struggle with. Many distilleries, big and small, source grains from common suppliers, but the bigger companies often receive volume discounts. Even if a small distiller used inferior ingredients (most don’t), they would still be forced to sell their product at a higher price because of their smaller economies of scale and higher relative overhead.

In all these cases, larger scales lower costs and achieve consistency without necessarily sacrificing quality. As long as a company is devoted to achieving a certain standard, and stays focused on the process, the size of an operation is irrelevant. This is why distilleries like Wild Turkey and Buffalo Trace are able to make bourbon that is vastly superior to that made by many of their smaller competitors, and still priced for less. Ironically, the part of the process most responsible for how a whiskey tastes—around 60 percent of flavor, in the estimate of most distillers—involves the least amount of work: pouring a spirit into a barrel and simply waiting for it to be ready.

Perhaps the reason why whiskey confounds the expectations we hold for most foods is because it is both agricultural and industrial. Today we tend to think of these things as competing forces, but whiskey combines the two: it starts as a grain in a field, then is heavily processed by machines. In all parts of the world where whiskey has flourished, it did so in the wake of an Industrial Revolution that transformed economies from agricultural to industrial while political leaders like Thomas Jefferson and Alexander Hamilton debated about what all the changes meant. For a time, Americans considered industry compatible with agriculture, revolutionizing farming in helpful ways that freed the masses from the toil of fieldwork. Many whiskey brands up until the mid-twentieth century boasted that their distilleries were industrial factories. In the 1940s, Hiram Walker even commissioned the artist Thomas Hart Benton for a series of advertisements reminiscent of images from the TV series
Industry on Parade
.

But industry in America eventually overshadowed agriculture. In 1870, close to 70 percent of Americans were employed in farming, the number falling to 2 percent by the twenty-first century. The toil of field work was replaced by assembly lines, and then by the drudgery of desk work. As American rural life moved into the margins, whiskey advertising, forever drawing on nostalgia, put aside the Thomas Hart Benton advertisements of industrial efficiency and revived romantic visions of an agrarian past. Today, words like “heirloom” and “heritage” have
taken on the marketing power that words like “purity” once held, when its use on whiskey labeling was debated during the passage of food and drug reforms. The sexiest of today’s newest distillers, calling themselves “grain to glass” producers, proudly brag that they grow their own grains, usually in a field behind the distillery (imagine a yeoman farmer making the same boast as his neighbors stand around wondering why that’s a big deal).

Agriculture is important to understanding one part of bourbon’s nature, but if we truly want to understand whiskey we must also think of it as an industrial product. The British writer Andrew Jefford put it best when talking about his beloved scotch: “It may be disagreeable to most whisky lovers, then, but it is hard to reach any conclusion other than that a modern bottle of whisky is, like a can of cola, a post-agricultural triumph whose ideals are more industrial than agricultural,” he writes. “Whisky aroma and flavor are overwhelmingly a consequence of the processing of those raw ingredients (malting, brewing, distillation, wood aging) rather than the ingredients themselves.” Whiskey, Jefford concluded, was more a product of “manufacturing techniques and brand-building endeavor than of earth, stone, and sky.”

But even when whiskey confounds expectations—big versus small, agricultural versus industrial—perceptions drive reality. Consumers inevitably value the sense of intimacy found in smallness or the simplicity found in agrarian life, even if those things are just illusions. Does it really matter if a distiller grows his or her own grains or is using antiquated equipment? The only way to judge is through a blindfolded tasting.

The bourbon in a bottle of Maker’s Mark might have changed very little as the company grew, but opinions of the brand are nonetheless influenced by outside factors—it’s yet another reminder that we taste with our minds as much as our senses. People are loyal to brands, but often wary of the corporations that own them. Some longtime drinkers of Maker’s suspect that the pressure to meet increased demand and to grow as a company have caused the company to lower the bourbon’s age a bit since the 1980s, which is something that’s hard to know for sure
because Maker’s doesn’t carry an age statement.
*
In 2013, those pressures became public when Maker’s Mark cut its proof from 90 to 84 in an effort to boost its supplies. The decision came under Bill Jr.’s son Rob, who took control of Maker’s in 2011. In a press release, the company told customers that they wouldn’t be able to tell a difference.

Maker’s customers were livid, flooding the company with angry responses. For a brand that built its reputation as a connoisseur’s drink, playing to the sensibilities of people who pride themselves on being able to detect such differences, Maker’s decision was surprisingly tone-deaf. Within a week, Maker’s Mark reversed the decision and issued an apology. “We totally got it wrong. . . . You spoke. We listened.” Rob Samuels later told reporters that the company’s customers “would rather put up with the occasional supply shortage than put up with any change in their hand-made bourbon.”

The strong response from customers revealed the brand’s marketing effectiveness: people had reacted as if Maker’s Mark were their own private whiskey company, forgetting that no such personal relationship actually exists and that the company is part of a cutthroat industry designed to make money. Maker’s Mark had broken the spell of its own mythology by undermining the sense of intimacy it had so carefully crafted. When Jack Daniel’s—much less of a connoisseur’s quaff than Maker’s—made a similar decision to drop proof a few years earlier, there wasn’t a peep from customers.

Bill’s mood noticeably changes when I mention Suntory, the Japanese whiskey company that bid to buy Beam Inc., the parent company of Maker’s Mark, for $16 billion in early 2014 (a week before our afternoon together). The announcement sparked a flood of xenophobic outrage in the United States as people interpreted the move as a loss of treasured American icons to a foreign power. Most didn’t realize that by this point in history, half of the eight big companies that control nearly every drop of American whiskey are owned by corporations
headquartered overseas. It’s the reality of the world economy, and many U.S.-based liquor companies likewise own many foreign brands (for instance, Beam-owned Courvoisier cognac, a treasured French icon that features a lock of Napoleon’s hair in its visitor center). But regardless of who owns what, the 1964 resolution mandates that bourbon can only be made in America, keeping domestic jobs secure. This point was lost on many, and Bill called the outcry from angry Americans a bunch of “bullshit.”

Japan has a deep and abiding love for whiskey.
*
The nation first started building its own whiskey industry after World War I, modeled after the scotch world. The drink wasn’t popular at first, but was reinvented after World War II as the glamorous drink of the occupiers. Slowly, the industry matured and today Japanese spirits are coveted by whiskey geeks the world over. In many cases, the companies that make them carry reputations for focusing on the product more than on marketing. “It’s reverential. They geek out on it,” Bill said. “When you go to their distilleries, it’s like going to church.” In contrast, he said the American approach was focused more on “instant gratification.” Under Suntory’s ownership, Maker’s Mark would no longer be publicly traded, meaning shareholders’ short-term views of profitability and their obsession over quarterly returns would be less likely to undermine what is a long-term business. “Goddamn, I wish we had had them twenty-five years ago,” Bill said about Suntory, welcoming the change and acknowledging the kind of pressures inevitably faced by companies that have given up some of their independence under corporate buyouts. Fortunately for Maker’s, Japanese spirits companies have an excellent track record. For example, under Kirin’s ownership, Four Roses has regained the reputation it lost under Seagram’s control; products made by France’s Louis Royer Cognac have improved under Suntory’s influence; and likewise, Suntory’s ownership of scotch legend Morrison Bowmore has generally been good for the company. These are all strong
indicators that Suntory might actually respect the product integrity of Maker’s Mark bourbon more than a publicly traded U.S. company that feels greater pressure to reap short-term profits.

But even though the Japanese whiskey companies excel at making good products, Bill Jr. thought they were weak on marketing. “They are
totally
ineffective at making those products into international brands,” he said. As far as Japanese whiskey brands in the United States were concerned, “
nobody
knows about them,” Bill said with a shrug. “They could benefit from having some of this ruthless U.S. marketing competency laid against their wonderful products.”

In this way, two empires become one.

 • • • 

With bourbon’s revival Maker’s Mark has become a celebrity alongside a few other star brands. As the excitement reached a fever pitch in the century’s first decade, a few of those celebrities turned into divas. None is more famed than Pappy Van Winkle, which is sold in fifteen, twenty, and twenty-three-year-old expressions. After the brand was created in the early 1990s, it often went ignored, but eventually became so famous it was given its own clothing line and appearances on popular TV shows. The brand’s popularity has even spurred a black market, where empty bottles sold online can be filled with far less expensive bourbons that taste surprisingly similar (like some of the W.L. Weller brands) and resold for three or four digits. In 2013, a dramatic heist of Pappy cases at Buffalo Trace, where it is made, sparked national headlines.

Bill Samuels Jr. grew up around Pappy Van Winkle but rolls his eyes at the craze surrounding the brand that is named after the man. “I’ve never tasted a twenty-year-old whiskey I could drink, because it’s just all wood, it’s all tannins. But you get your mind adjusted—‘I paid all this money, I gotta like it,’” he said. The comment illustrates two oft-forgotten truths of bourbon: that much of the connoisseurship is all in our heads, and that some of the most celebrated brands, despite the buzz surrounding them, aren’t necessarily worth the effort.

Bill’s attitude is echoed among various other members of the
bourbon cognoscenti, who have long considered the popularity behind many of these “oak bomb” bourbons more a product of hype than of craft. Behind closed doors, master distillers often describe bourbons in the range of twenty years old as having a taste similar to “sucking on a pencil,” an expression that many of them are fond of using. They quickly point out that bourbons that old are often coveted simply for their relative rarity. The Pappy line manages to avoid this pitfall—it is clearly aged in very mild parts of the warehouse—but nonetheless falls far short of the hype surrounding it. Scores of other brands, most of them easier to find and far less expensive, match or surpass the Pappy labels. Nevertheless, the reality of Pappy is beside the point—what is far more interesting than its flavor is how it arrived at its lofty perch and helped create a new dimension of bourbon marketing.