How Will Maker's Drinkers Really Respond to Watered-Down Bourbon?
Judging by the storm of protest surrounding the recent decision by Maker's Mark to water down its bourbon, you'd think the brand is diluting its product with the blood of baby panda bears. Twitter has been all a-twitter with angry bourbon fans reacting to Maker's decision to decrease the proof of its signature brand by three percent—from 90 proof down to 84 proof—in order to increase supply and meet crushing demand. Maker's will literally dilute its bourbon so it can sell more of it, the same way a restaurant would dump water into the soup when running low. After Maker's announced its decision last weekend, one bartender asked me what America is coming to.
Regardless of how Maker's will taste, the principle is what has some drinkers upset. Many bourbon drinkers commented that Maker's is transferring the sting from its bourbon to its customers' wallets. The company will offer what is clearly an inferior product, but the price isn't going to change. If the brand was having a hard time meeting demand, why not just raise the price and keep the quality the same? Isn't that how economics works?
Some have blamed the decision on the corporate overlords at Beam Global, which owns Maker's. They've argued that raising the price of Maker's would put it in competition with other brands in Beam's portfolio. This argument, however, doesn't entirely make sense. Maker's is a Beam subsidiary that's run entirely on its own, which is common for many whiskey brands residing under corporate umbrellas. Besides, if Beam were pulling the puppet strings, wouldn't it have gone with the successful strategy it used when its Knob Creek label faced shortages a few years ago? Back then, Beam announced it wouldn't lower the proof of Knob Creek and sent loyal customers T-shirts stating "I survived the drought." The press coverage was positive, and Knob Creek drinkers didn't storm the distillery with pitchforks and torches.
Maker's is taking a much bigger gamble and betting that the majority of its customer base won't really care about the cut. Lowering the proof of a standard 2 ounce pour of 90 proof Maker's would require about 20 drops of water (I welcome anyone to double check my math on this). Does that really matter? It's probably enough for bourbon connoisseurs and die-hard fans to notice, but not so much for most casual drinkers. In a letter to customers, Maker's claimed that it had performed "extensive testing with Maker's Mark drinkers, and they couldn't tell a difference."
Wow. That's a slap in the face of knowledgeable bourbon fans who are proud of their abilities to detect such nuances. Maker's originally became successful by marketing itself as a connoisseur's bourbon, so the statement is a little surprising. It's no wonder that the kind of people who blog about bourbon and reference it in their Twitter handles are annoyed.
The distillery's move, however, offers a rare glimpse behind the curtain and suggests how Maker's might actually view most of its customer base—they're not really thinking of the kind of bourbon aficionados who are currently up in arms. Most bourbon geeks I know treat Maker's the same way their beer brethren treat Sam Adams—a perfectly acceptable quaff when it's the best thing offered at the bar of a conference center or chain hotel. I've long heard Maker's described by bourbon snobs as "what college kids buy when they want to splurge." This is not an insult. It just means that Maker's is often a "gateway" bourbon that drinkers enjoy on their way to educating themselves about the extremely subjective intersections between price, quality, and value that exist in the whiskey world.
To use a car analogy, Maker's is a Pontiac bourbon. In the 1950s, General Motors marketed Pontiacs to young professionals beginning promising careers. On one side of Pontiac you had Chevys, which were for working-class folks with solid jobs; on the other side you had Buicks and Cadillacs, which were for those who had "arrived." In the bourbon world, Early Times or Evan Williams would be Chevrolets—they pretty much get you where you need to go without any frills. Brands like George T. Stagg are for hot rodding bourbon geeks who like to get under the hood and discuss particulars like mash bills and char ratings. Maker's sits somewhere in between—it's a dependable ride with a little bit of zip, but nobody's really going to notice if you knock the horsepower down a few percentage points.
Maker's move is probably a shrewd strategy to increase supply so it can expand into foreign markets, angry domestic customers aside. Industry watcher Chuck Cowdery on his blog recently noted triple-digit growth in some foreign whiskey markets that might not care about lower proofs as much. In Australia, for instance, Maker's is already sold at 80 proof. The Distilled Spirits Council of the United States (DISCUS) recently reported that sales of Tennessee and bourbon whiskies increased by 5.2 percent in the U.S. during the past year. Exports to foreign markets, however, were up 16.5 percent, 70 percent of which were whiskey. That's a difference Maker's must have its eye on.
Maker's has a long history of decision-making that doesn't make sense at first but has served the company well in the long run. The brand might lose American customers by watering down its bourbon, but increased sales to an international market will probably make up for it. And besides, I doubt most of its domestic customers will end up caring that much either. And for us geeks, there are plenty of other bourbons.
About the Author: Reid Mitenbuler is a Washington, DC-based writer. He's currently working on a book about bourbon. Find him online at The Bourbon Empire.