Beam Pulls Plug on Decision to Dilute Maker's Mark


Dear Client:

You'll recall last week Beam received an overwhelming amount of criticism for announcing that it would be diluting the alcohol content of "power brand" Maker's Mark in order to keep up with demand. Consumers called for boycotts, while industry members claimed it was all for the bottom line. Even Wild Turkey took the opportunity to capitalize on the gaffe by poking fun of Maker's on Facebook. The company posted: "Want proof? Give 'em the Bird," and "We distill our bourbons at a lower proof than competitors, allowing us to add less water and preserve more of the Bird's flavor."

Beam announced yesterday they would be backpedaling out of the decision as quickly as possible. Effective immediately, Beam will return the brand back to the original 90 proof. Once again the company's spokesmen are hitting the press circuit. "The message was so loud and so consistent that it was almost like every one of them was in the same room together. It was pretty easy reading that and realizing how we had missed the mark, how we had disappointed our customers," Bill Samuels Jr., chairman emeritus, told ceo Rob Samuels added that their complaints were "less about proof... they don't want to see anything change."

In a note obtained by WSD, Beam ceo Matt Shattock told distributors "While we thought we were doing what's right for the future of Maker's Mark, we saw an intense consumer reaction opposing any change to the product." He continued: "Brand fans told us loud and clear that they want Maker's the way it's always been, even if it means that supply runs short."

In a separate letter to consumers Rob and Bill apologized for the decision. "You spoke. We listened. And we're sincerely sorry we let you down." They continued: "Your trust, loyalty and passion are what's most important. We realize we can't lose sight of that. Thanks for your honesty and for reminding us what makes Maker's Mark, and its fans, so special."

Many in the industry have wondered aloud if Beam was pulling the strings on this move. When asked directly if this was Beam or Maker's Mark's idea, Bill said "It was our decision and they supported it."

Now that Maker's has appeased its customer base we are still left with the initial shortage problem. Neither Maker's Mark nor Beam is willing to talk yet about pricing, but Matt says they will continue "aggressive investment" at the Maker's Mark distillery to support the brands growth trajectory. They plan to build more rackhouses, increase production capacity and add new, larger tasting rooms. As for the 42% abv bottles that actually made it to the market. "We think it's very likely that, that limited amount will actually turn into collectible bottles," said Rob.


JOHNSON BROS AND B-F AND BACARDI SETTLE SUIT. The Johnson Brothers vs Brown-Forman and Bacardi case has come to a close with a settlement out of court. You may recall in March 2011 Johnson Brothers wine and spirits distributors filed a lawsuit against Brown-Forman and Bacardi based on the claim that they conspired together to terminate Johnson's distribution rights in their respective states. North Dakota for Bacardi, and Iowa, Minnesota North Dakota and South Dakota for B-F. Johnson also claimed the terminations were done without cause. In September 2011 a judge dismissed the complaint, but Johnson filed an appeal in February 2012. However, before the case really got off the ground Johnson brothers requested the judge to drop the case.

D'USSE EXPANDS TO SIX MAJOR CITIES. Bacardi's recent entrance in the Cognac category, D'usse, has expanded into some new markets. Recall the brand initially launched this summer in New York City and Washington D.C. Now it has hit shelves in Miami, Chicago, Los Angeles, New Orleans, Las Vegas and Houston. D'USSE is introducing its VSOP Cognac to its growing roster of U.S. markets via a series of exclusive, city-specific soirees that leverage culinary icons and cultural happenings over the next few months. At $45 a 750 ml, D'usse competes with the likes of Hennessy, Remy Martin, Courvoisier and Martell.

Until tomorrow, Emily

"Our past experiences may have made us the way we are, but we don't have to stay that way. "
- Joyce Meyer

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