Tuesday, April 3, 2007

Bacardi Sniffing at Bourbon?

Miller Brewing's BrewBlog tipped me off to this brief squib in an LA Times story about the new directions Bacardi is taking under new CEO Andreas Gembler. What caught their interest was that Bacardi was angling to buy Absolut, currently owned by the Swedish government; the Swedes are making noises about selling it off. But what caught my interest was this line:

"Gembler says Bacardi could expand into other kinds of spirits and that it would like to own a cognac and an American whiskey — to cash in on the increasing popularity of the category."

Follow the money: American whiskey is heating up. Heaven Hill is expanding production and bottling capability. Maker's Mark doubled their distilling capability a few years ago. Good news for American whiskey makers, and eventually, for American whiskey drinkers.

13 comments:

Eric T. said...

What bourbons aren't already owned by giant conglomerates?

Lew Bryson said...

What's that matter? EVERYTHING is for sale...for the right price. Heaven Hill is independent, but growing fast enough that they're probably safe if they want to be. They're also family-owned, which keeps them out of most acquisition, but then, so's Bacardi, and so was Glenmorangie.
Bacardi's got a big pot of money to go hunting with, and if they wanted to peel off a bourbon brand, they probably could, if they wanted it badly enough.

Eric T. said...

I drink Bulleit Bourbon -- owned by Diageo I think -- so I guess it doesn't really matter to me.

I'm no anti-capitalist, but I do think smaller brands lose some charm when they are bought out by the big guys.

Also, don't assume any snark in my question. I meant it sincerely. I did some Google searching and every bourbon brand I searched was owned by a big conglomerate, which surprised me.

Lew Bryson said...

Oh, no snark taken. If anything, I was being a bit snarky towards the "everything is for sale" crowd, not you. But Heaven Hill IS independent and family-owned, and Kentucky Bourbon Distillers will be open soon and is independent (Okay, that's cheating a bit). Buffalo Trace is owned by Sazerac, but Sazerac isn't exactly a huge, throbbing multi-national, and the president, Mark Brown, has his office in a building that's smaller than my house right on the distillery grounds; that counts for something, in my book.

As for smaller brands losing charm...that is, by definition, subjective, but I'd fight it. I know a lot of these folks, and how they do it is still pretty damned small-scale and ornery. Dickel, for instance, though not a bourbon (but definitely an American whiskey), is owned by Diageo and still retains plenty of "down in the holler" authenticity.

All that said...I do get your point, and don't necessarily disagree.

bill mc said...

Does this bode well for the possible (perhaps unlikely) revival of Michters?????

Or at least the revival of the dilling method and the recipe....


[I still have an unopened bottle in my parents liquor closet...:)]

I can hope.

Lew Bryson said...

Bill,

There are more than a couple people out there who would love to revive Michter's; I've talked to a couple in the past month. But reviving Michter's is going to be a major project, and not just about recipe and still. There's a lot involved, and the whole Michter's mystique is pretty involved.

I guess what I'm saying is...no, this doesn't really affect it. If Bacardi's looking, they're looking for something that's already established, not something to build. The evidence of a boom in bourbon, yeah, that bodes well. I'm just worried about someone getting hold of it who doesn't know what they're doing. Until then, I'm holding onto my four remaining bottles!

Harry Spade said...

Lew, I seem to recall some writings of yours from some time back ( a Buzz, perhaps?) where you advocated supporting local establishments, i.e. restaurants, breweries, etc., as opposed to chains. I won't argue that point; 99% of the beer I purchase is of the southeastern PA region. But I'm curious to know if you've ever reconciled- in print- how to enjoy products owned by giant conglomerates and still support local brewers/distillers.

And I ask this sincerely; no snarky-ness intended. I'm sure a lot of people prefer to "drink local" but have a hard time doing so without severely limiting their choices.

On the other hand, I don't drink whiskey so I admit this question may be utterly pointless.

Thanks.

Lew Bryson said...

Well, Harry...there's always this answer, but I think you're looking for more than that!

I do fervently support small or local establishments, though my definition of that flexes a bit: Iron Hill's at six units, soon to be seven, but I don't put them into the "CHAIN: AVOID" column yet, for instance.

But whiskey is a bitch to do that with. There just aren't that many small, independent whiskeys, and the ones that are are very limited production and not easy to find. And some of them just don't suit my fancy, and I have always said that I'm not going to drink something that sucks just to support "the cause."

But I do still drink big brewer beer: Spaten Optimator, for instance. Spaten's owned by InBev. Guinness is owned by Diageo. Hacker-Pschorr Ofest: Heineken. Pilsner Urquell: SAB Miller. Leinenkugel Creamy Dark: also SAB Miller. And I drink them for the same reason I drink big distiller whiskeys: they don't taste like homogenized sameness.

Maker's Mark and Wild Turkey, for instance. Both are owned by large companies, but they have been successful enough doing things their own particular way that those large companies have been smart enough to leave them alone.

Some of this is rationalization, Harry. But some of it is a difference in situation. Chain restaurants tend to stifle creativity. Right now, the booze business is rewarding it, so things are good, and interesting. And as long as good and interesting things are being made, I'll reward them by purchasing them. It's always about the drink.

That answer it?

Eric T. said...

Is Wild Turkey Russell's Reserve still 101 proof anywhere? I know it's 90 proof in Pennsylvania now.

Anyone think that's an improvement?

I think most of the blame for the change should go toward state legislators for silly tax laws, but if Wild Turkey weren't owned by a big company, would the change still have been made?

Lew Bryson said...

Eric,

I wouldn't blame tax laws. This really comes down to no one in production apparently having a clue that American whiskey -- even high-end American whiskey -- would get so popular so quickly (although, to give credit where it's due, Buffalo Trace does seem to be more on top of the rye boom than most distillers). In the case of Russell's Reserve, that would have meant predicting a huge surge in premium bourbon sales in 1996, which I can tell you, no one was. No blame there, really, no one could have reasonably foreseen this, when vodka was in the midst of a huge boom, and gins looked like The Next Big Thing.

But taking a closer look, this would seem to be a business decision. Given that you don't have enough whiskey to fill demand, what do you do? Do you change the whiskey, lower the proof by adding more water, in order to meet the full demand? (While keeping the price up, of course.) Or do you attempt to change the demand by raising the price and keeping the whiskey the same?

The catch is, the first choice may also change the demand, by people being not as interested or impressed by a lesser-strength whiskey... especially after Jimmy Russell has been quoted many times that 101 is the right proof for his whiskey; hell, he's said it to me.

As you can probably tell, I think the wrong choice was made, and I'll be writing more about that, once I find out more about what actually happened. And yeah, I'd guess that this was probably a 'suit' decision, not a decision made in the warehouse.

Eric T. said...

Thanks for that last post, Lew.

Very enlightening.

While we're on the subject of bourbon, anyone have any suggestions for good value bourbons?

I love products that hit the sweet spot on the quality/price curve.

Lew Bryson said...

I still think Wild Turkey 101 is a good value, as is the Jim Beam Black. And the Evan Williams Single Barrels are an outrageous value, as is the Elijah Craig 12 Year old. Hmmm...Weller Antique, Elmer T. Lee, and Buffalo Trace, (if you can find them) all good. Old Grand Dad Bottled in Bond is damned good, and inexplicably cheap.

Harry Spade said...

Thanks Lew. I appreciate both answers!

But I think this quote from your post sums it up- I'm not going to drink something that sucks just to support "the cause."

Amen.