Making its mark

The UK market for American whiskey is awash with Jack Daniels and coke, though drinkers are becoming much more receptive to variations on the theme.  Maker’s Mark Bourbon, it would seem, is stockpiling for a goldrush, says Patrick Schmitt

IT WAS after a Lionel Richie concert (I was filling in for a friend), where I was first exposed to real barmanfuelled enthusiasm for Bourbon.  A group of us had entered one of the only quiet haunts in Nottingham’s youth-filled city centre at 11ish on a Friday evening, and someone ordered me a Mint Julep.

A minute later a cry came from the bar: "What kind of Bourbon do you want?" Surprised at this attention to detail, rather than simply point to a preferred brand, I walked up to the barman, and asked what he suggested for the cocktail. "Maker’s Mark," he said, "You want something smooth, and Maker’s uses wheat instead of rye, which means it has less spice."

He then offered me a comparative tasting, and made me the cocktail. "Like it?" he chirped after my first sip. I nodded, looking up from the glass.  "You need to try my Old Fashioned then," he said, before producing an almost finished bottle of Elijah Craig 12-yearold, his chosen base for this classic drink.

I tried the Bourbon, ordered an Old Fashioned, and within half an hour the whole table was drinking this expertly-prepared cocktail, with its high-quality base spirit, having started the evening on a mixture of house wine and lager.

And ever since then, it’s been apparent to me not only how effective barmen can be in selling particular brands, but also how many have a particular fondness for Bourbon, a highly mixable spirit that seems to have escaped the somewhat anoraky following you get for single malts, or the staid image of blended Scotch.

Furthermore, the Old Fashioned is almost a benchmark cocktail for a bartender, a classic on which many are judged.

Case studies

Nevertheless, such reverence for Bourbon is rare among consumers, with most American whiskey drunk mixed with coke, and little of that being Bourbon.  In fact, it’s fair to say that few appreciate the difference between Bourbon and American whiskey, and, in fact, any following for one or the other is likely to be brand-based, not connected to category definitions or particular production processes.

The market for American whiskey says it all.  The figures vary depending on who you speak to, but Drew Munro, commercial and marketing director for Europe, Jim Beam Brands worldwide, reckons about 720,000 cases of American whiskey are sold in Britain, of which about 100,000 are Bourbon.

The rest, those 600,000 cases plus, is almost entirely made up of one brand, Jack Daniels – a spirit that has managed to carve out a whole sector for itself, and in the process become a generic representation for its category, a bit like Bacardi has come to represent rum.

In both cases this has been achieved, to some extent, by aiming at a younger generation, while both brands mix well with coke – Roy Evans, brand manager of Buffalo Trace, believes some 90% of Jack Daniels is drunk this way.

And, importantly, Jack Daniels seems to have successfully distanced itself from the older image of dark spirits in general.  But where does that leave Bourbon? Interestingly, Jack Daniels’ success has not necessarily been at the expense of Bourbon, probably the most tightly regulated spirit in the world in terms of production.

Rather, it has helped pave the way for an overall interest in American whiskey and, within that, Bourbon, as those who enjoy the smoky sweetness of Jack Daniels begin to look at other brands with similar flavour profiles, but perhaps more complexity.

And within Bourbon itself there is a significant category leader, Jim Beam.  Munro anticipates that this brand will shift around 63,000 cases by the end of 2004, achieving a 37% growth year on yearn (compared to an overall American whiskey category growth of 13%).

Evans, however, reveals slightly more modest estimates, believing Bourbon as a category to be 80,000 cases strong, with Jim Beam accounting for around 50,000 of those.  The difference in statistics may arise because Jim Beam is currently the house American whiskey in Wetherspoons, a multiple on-trade outlet that doesn’t supply data to ACNielsen.

 Jim Beam replaced Jack Daniels last year, significantly boosting sales of the Bourbon in the UK on-trade, while also ensuring a listing for Knob Creek in the branded bars, as this premium Bourbon is owned by Jim Beam Brands.

Fine Bourbon

However, it should be noted that Bill Samuels, president of Maker’s Mark Distillery, is not happy with the term "premium Bourbon", preferring instead to refer to old and new Bourbon, or traditional and fine.

Samuels says that it was Maker’s Mark which started the trend for slightly higher priced Bourbons in the US, those targeted at the urban professional as opposed to "middle America", where much of the Bourbon is consumed in the US, according to Henry Joe of Heaven Hill Distilleries.

But, however you describe such Bourbons, they account for roughly the 30,000 cases left after you remove Jim Beam from the equation.  This is fairly evenly split between a handful of brands including Woodford Reserve, Wild Turkey, Knob Creek, Maker’s Mark and Buffalo Trace, although Munro points out: "None of these brands is bigger than 5,000 cases."

Furthermore, none of them have the potential to be large-scale whiskies because of supply constraints.   As Evans says: "There are only eight distilleries making Bourbon in Kentucky, and you need a huge inventory of barrels and a large facility to be able to develop a Bourbon brand.

This explains Maker’s Mark’s potential and its novel move.  Samuels believes the UK "is three or four years away from becoming a runaway success when it comes to fine Bourbon", and is planning to deprive some markets of inventory, not to be sold in others immediately, but to be stored for future, projected demand.

"We are holding back the reins at the moment, and when the swell is there, we will let go." This potential increase in demand is based on a "hunch", although Samuels does admit he gets "enough calls to know something’s going on".

In reality, such a development would involve withdrawing the brand from some off-trade accounts like duty free, and certain countries where the potential for significant growth is not so apparent.

"We’ve already dropped Maker’s from the US airline industry," says Samuels, "although that’s partly because they keep going bankrupt and don’t pay their bills."  However, something Samuels didn’t intimate, but might be possible if his projected supply-demand imbalance does occur, are price increases for the brand.

After all, if greater volumes of the brand are to be redirected to Britain, then they must bring a suitable reward.  But, to head one step further up the scale of quality and price, there is a reputed growing interest in "Boutique" Bourbons (as well as American whiskies), although from a small base.

"There is a much greater take up of single-barrel and older Bourbons," reports Evans.  He notes that Sazerac’s Antique Collection – which includes a 16-yearold, uncut, unfiltered bourbon called George T Stagg, a 17- year-old Bourbon called Eagle Rare and an 18-year-old rye whiskey called Sazerac Rye – has attracted "increasing interest from bartenders.

We have a UK allocation of 120 bottles of each, our first release was three years ago and it took us 12 months to sell out. In our second year it took us seven to eight months and now, our new releases landed at the end of the November and 90% of the whiskies are pre-sold, as bars take an array of boutique Bourbons."

Single-barrel promise Joe at Heaven Hill also suggests there is a growing demand for these top-end Bourbons, in particular singlebarrel versions, which he believes is connected to "the single malt craze".

He argues: "We are on the edge of a trend here where people may start looking at other American whiskies [aside from Jack Daniels]."  He welcomes this, as the discovery of "really fine American whiskies" helps the category "get away from the Western, bad boy, gunslinging image".

And, talking of image, interestingly, the development of higher-end Bourbons is particularly handicapped in Germany, as Bourbon has negative connotations there; a hangover, apparently from the days of American servicemen being drunk on the likes of Jack Daniels and Jim Beam.

But, to return to Britain, as Munro explains: "While barmen are interested in production characteristics, ultimately the vast majority of American whiskey is drunk with coke."  A combination which, it should be noted, has ensured the success of Jack Daniels in particular, and now other Bourbons such as Jim Beam.

And the "JD and coke" bar-call also, to some extent, explains US whiskey’s skew towards the on-trade in this country, with a 60:40 ontrade: off-trade split.  The rise of the more premium end of Bourbon, on the other hand, is probably explained by an increasing interest among certain UK consumers in prestige brands in general, and Munro points to the explosion in premium vodka brands as evidence of this, as well as the increasing interest in malts.

But while vodka and Scotch have been innovative in both production and packaging, some have suggested Bourbon could do more, citing, Wild Turkey Sherry Signature (which undergoes a second maturation in Oloroso Sherry casks) as one of the few attempts to really appeal to whisky enthusiasts.

However, it’s unlikely that line extensions such as this will generate significant increases in category interest by themselves, while strict controls over Bourbon production allow little room for experimentation.  Rather, it is substantial investment in marketing that will really build consumer awareness.

The question is, which brand will lead the way?