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Saturday, September 20, 2008

Kentucky Bourbon Festival: This is The End...

Not much more to be said. I got my tuxedo on (no, sorry, no pictures, and actually, there's no pictures from the whole night -- I left the memory card in the damned laptop!), basted myself in the air conditioner, and went outside to catch the shuttle -- no way I'm driving to the Gala. It was a gorgeous night, warm but not hot, some huge soaring cumulus clouds piling up in the east, catching the sun, Maxfield Parrish-style. The line, as always, was incredibly long, but moved well, and soon I was strolling the floor of the tasting "tent."

The first person I ran into that I knew was Heaven Hill president Max Shapira, who grabbed my arm and said, grinning, "Let me buy you a drink!" He did get me lined up right quick with a Henry McKenna BiB on the rocks (always grab that when I can), and we chatted a bit, just stuff, and then he passed me on to his marketing maven, Larry Kass. We got caught up, I thanked him for the great lead-in he gave me on my latest Mass Bev Biz story*, and he told me about the effect the Ryder Cup had on KBF this year: events sold out, but at a much slower rate. Why didn't they change the date? Hard to say.

On I wandered, shaking hands with friends in production -- Dave Scheurich at Woodford, Truman Cox at Buffalo Trace -- and press relations -- Susan Wahl at Heaven Hill, Angela Traver at Buffalo Trace -- and yes, a nice glass of Four Roses Single Barrel, damned nice whiskey. It was not long after that when I ran into Whisky Magazine's Gordon Dundas and my evening went down the tubes.

Well, kind of, and it certainly wasn't Gordon's fault. Gordon actually was good enough to let me know that our respective magazines, which were supposed to have been unboxed and displayed at the bag-check tables** on the way into the dinner tent by this time, were still sitting on a pallet in the back corner of the tasting 'tent.' Well, holy crap. He'd talked to Festival people about it, and they said once people had cleared out of the 'tent' into the tent (no, really; just think of them as two large spaces connected by a hall with restrooms), they would get the mags onto the tables. Well, okay, it would be impossible to do it while they were in the 'tent,' and people always take the mags on the way out anyway. We'll take a look mid-meal, Gordon proposed, and see how they've done on that. It sounded good, and we celebrated our collaboration with a Russell's Rye.

Then it was dinner time. The beef was quite good, the beans good, the rest of it...okay. Oh, the cake was quite good. After a bit, I went looking for Gordon, and couldn't find him. Hmmm...I gotta take action. I went out, and no mags were out. I went next door, and there was the co-chair of the gala, looking just wiped out, and I dumped my magazine problem in her lap. Oh, they'd completely forgotten, and they were sorry, and they'd get them out there. Can I help? Sure! So I started lugging boxes of magazines out the bag-check tables, as did the co-chair, the security guard, and a couple other folks. Gordon showed up shortly -- he'd been in line forever for dinner ("The Bourbon Festival seems to be all about queues," he said, with some asperity) -- and pitched in. We both wound up handling each other's mags, very co-operative. We had a lot of mags out in fairly short order, sweat like pigs, and decided it was time for more whiskey.

I hung out some more with the Buffalo Trace folks and some of the press guys I'd met at Beam yesterday, talked to Freddie Noe and Parker Beam a little, set up an interview appointment with Barton's Greg Davis (jeez, he whipped out his iPhone and starts saying, "Well, when's good, Lew?" Hell, I didn't have my damned calendar with me; guess if I'm gonna ask people for interviews, I should carry it!), and then decided I'd had enough. The free shuttle took me back here -- great idea, not sure who sponsored that -- and...that was it. I'm going to finish this, pack, and that'll be it for another year.

*Ask if it was a good year for straight whiskeys, and all you’ll hear about is the small batch bourbons, ultra-aged ryes, single barrel Tennessee whiskeys, and special Canadian bottlings, and that’s where the romance is, and that’s where the growth is, and that’s what’s driving the market! You don’t hear about the cases of flagship brands that continue to move things along every day.

Reality check, in the form of Heaven Hill’s marketing guy, the grinning, gravel-voiced Larry Kass. “Numbers can’t lie,” Kass said, dropping the facts on the table (he was checking the 2OO8 Adams Liquor Handbook). “The market is not driven by the super-premium whiskeys. It can’t be driven by super-premiums. They’re what, 75O,OOO cases out of 14 million? If you want to be generous? If you take just the top five brands [in the category], you’re talking about 72% of sales. There’s not a super-premium to be found among them, and there isn’t until you get down to Gentleman Jack, which is 12th, at 178,OOO cases.

“Look, there’s no doubt about it: the top-end brands are continuing to perform very well,” he said. “The supers continue to get a lot of the attention and that’s great, they have great stories to tell, they’re banner products. But the cases are in the meat and potatoes brands: Evan [Williams], Jack [Daniel’s], and Jim [Beam]. Those brands are continuing to grow very nicely. The distinguishing characteristic of the straight whiskey category is that the mid-tier brands are doing well, and that’s a feather in our caps.”

Pure Larry Kass: he has high-end whiskey, and he loves to talk it, but Evan Williams pays his mortgage. Well, actually, Burnett's Gin and Christian Brothers brandy pays his mortgage, but Evan Williams pays a good chunk too!

**When you get to the Gala, which you've paid $140 for the privilege of attending, you get a black cloth bag. Each distillery pours samples in their own glass, some of which are quite nice. And people (okay, women) collect them and put them in the cloth bags (sacks, they call them), 8 or a dozen. All too often, they'll just dump the whiskey out. And when they go into the dinner tent, they check them. They had to start offering this service because so many people were taking a dozen glasses into the dinner tent...and breaking them. Me, I put two glasses in the bag and handed it to the first determined woman I saw. Everyone's happy.


Anonymous said...

“The market is not driven by the super-premium whiskeys. It can’t be driven by super-premiums."

Depends what you mean by "driven," says I. The big five score the sales, no doubt, but the supers are what have people thinking and talking and writing about bourbon. Call it the Sam Adams effect, where a seemingly endless slew of specialties keep the brand in public focus and stimulate sales of the flagships. It's a proven strategy that works, whether for a single company or an entire segment.

Lew Bryson said...

That is, of course, the other side of the argument. But it doesn't explain why sales of blended Scotch whisky continue to languish while single malt sales soar, or why Canadian whisky sales are on the uptick for the first time in years -- decades -- without any significant similar upscale segment (sure, there's CR Cask 16 and 40 Creek, but the Canadian specialty niche is not even a niche yet, more like a hairline fracture). It's a model, sure, but it's an imperfect one.

And again...craft beer sales roar ahead without bringing along the rest of the beer market: Bud remains in decline, Bud Light Lime is surely not benefiting from anything that's happening with crafts. Coors Light sales are getting a boost from the direction of their advertising, not sales of Sam Adams putting a glow on "beer" and causing people to think, "Damn, that Sam Adams shit is hot, I'm gonna get a Coors Light suitcase!" I'm goofing a bit there, but really, I don't think the link exists.

Your "Sam Adams effect" only works within the niche. The buzz about Sam Adams Octoberfest and Summer Ale (which I heard went nuts this summer) keeps the brand in play, and maybe even benefits craft beer in general, but it does nothing for the whole beer segment.

I'd argue that bourbon may well be benefiting more from the still-growing popularity of NASCAR and some similar promotions (Evan Williams' association with the pro bass fishing circuit, for instance) than from the success of small batch. Bourbon flagship sales are kicking ass -- about 5% growth last year -- and looking at what's happening in other whisky segments does not explain that.

There's more to this. Which means...more places to sell stories. Oh, yeah.

Lew Bryson said...

Oh, just wanted to note that the 5%growth for the flagships and the bigger growth by premiums (and Maker's Mark continues to straddle that line, getting larger every year) was somewhat offset by continued declines by some other brands -- Early Times, for instance, continues to slip significantly (it's not a bourbon, but neither is Jack D.; they're still both in the 'straight whiskeys' category) -- the category as a whole still grew a solid 1% and out-did Scotch whisky. And the top three brands did grow around 5% each.

As Larry Kass put it, "The distinguishing characteristic of the straight whiskey category is that the mid-tier brands are doing well...”, and that's the nub of it.