Authors: Reid Mitenbuler
In 1976, the same year as the U.S. bicentennial and two hundred years after whiskey had supplanted rum to become the nation’s preferred spirit, vodka sales surpassed those of whiskey. Three years later, Hiram Walker closed its thousand-employee distillery in Peoria. It was another factory shuttered, just like countless others. “The day we got the news, there were men crying at their desks,” one woman who had worked at the plant told the
Baltimore Sun.
Bourbon suffered the sting of defeat and was in a dark place. But there was one brand representing a light at the end of the tunnel and a comeback. It would ultimately be bourbon’s secret weapon.
B
ill Samuels Jr., “Chairman Emeritus” of the Maker’s Mark Distillery in Loretto, Kentucky, grew up among Kentucky legends. He is the godson of Jim Beam, who died in 1947 when Bill was seven years old, and as a teenager he briefly had a job chauffeuring around Colonel Harland Sanders, founder of Kentucky Fried Chicken. As a driver, Bill quickly learned that the colonel had a foul temper after watching him rip a deep fryer from the wall and scream at staff for messing up the secret recipe. Back in the car, the young Bill asked Sanders if the tantrum had really been necessary. “Yes,” the colonel calmly told him. “Because now I know that I’ll never have to do it again.”
“He was a product guy, not a brand guy,” Bill told me during one afternoon I spent with him in Louisville. “It was about the coleslaw and the gravy and the chicken.”
The story is meant to illustrate the importance of creating a good product before building a brand around it. Bill uses the tale to illustrate the strategy his own family used to build Maker’s Mark, one of the most distinctive bourbons on the market. It’s sweeter than average, due to the wheat used in the mash bill instead of rye, with heavy accents of vanilla and caramel.
Bill eases into the Maker’s story by telling me about another Kentucky legend he knew growing up. In 1951, when Bill was just eleven,
Pappy Van Winkle gave him his first drink of bourbon. It happened as he was tagging along beside his father, Bill Sr., who was meeting with Pappy in his office at Stitzel-Weller just before the elder Samuels started the Maker’s Mark brand. As the three prepared to go have lunch, Pappy smiled and promoted the younger Bill to the next rung of manhood by shoving a glass of sloshing brown liquid into his little hands. Then he told him, “We don’t go to lunch until after two fingers.”
“I didn’t know how to drink it,” Bill said in a Kentucky drawl that is most noticeable when he swears, which is frequently. Now in his early seventies, everything he says is direct, confident, and punchy. He responded to Pappy by downing the drink in one gulp.
Maker’s Mark is one of the few brands that during the 1980s helped launch a turn toward “craft” labels that lifted bourbon out of the doldrums of the 1970s. At the time, the brand was a study in opposites. Other companies were retiring labels amid a crumbling industry, but Maker’s was starting one. When others slashed prices, Maker’s increased them, then proudly advertised that it was more expensive. Many considered the strategy a kind of brand suicide. Indeed, Maker’s failed to significantly profit for more than two decades. Industry insiders assumed the company was just a way for rich hobbyists to kill time.
Then, through luck and happenstance at the dawn of the 1980s, the label found itself setting the tone for the entire industry’s revival. By 2015 Maker’s would grow into one of the nation’s biggest bourbon brands by catering to niche markets fixated on luxury and craft. With that, Maker’s Mark wrote the playbook that this century’s emerging craft whiskey distilleries have used to design their own strategies. Bill receives multiple calls each week from upstart distillers seeking advice, and is arguably the nascent movement’s elder statesman. Of course, by this point Maker’s is so big that many have questioned the distillery’s “craft” status—making Bill Jr.’s story about KFC even more prophetic—although the bourbon that drove the brand’s rise remains relatively unchanged. Confronted by a foodie movement that sometimes values “smallness” simply for the sake of itself, Maker’s would in many ways
become a victim of its own success, offering lessons for those attempting to follow in its footsteps.
• • •
The Samuels family was one of the many small distilling clans populating Kentucky’s Bourbon Belt in the late nineteenth century, and its roots stretch back to the state’s early settlers. After Repeal, the T.W. Samuels Distillery was one of the many outfits that ultimately failed to stay open during the consolidation era. The reason, according to Bill, was that it tried to recreate what it had done in the nineteenth century, failing to adapt to the new industry. In other words, it didn’t take the path of outfits like Stitzel-Weller, experimenting with new ideas and recipes. Bill’s father had wanted to take a new approach, but he was shot down by his own father, Leslie Samuels, who was in charge of the operation. Looking back on advertisements the family ran in 1935, Bill tells me, “God, they were so stupid.”
The failure of the T.W. Samuels Distillery bothered Bill Sr. Bill Jr. as a young boy remembers him “whining about” it around the house. His pride was bruised, and the lingering memory became a source of tension in the family, particularly after Bill Sr. retired and was home more. His retirement had come early, after he was forced to sell out of other distillery investments, including one buyout that included rights to the family name. The sale, however, left him money he could use to build another bourbon brand. “He didn’t have to work,” Bill Jr. says. “He never went to the banks for money . . . it was a personal thing.”
The elder Samuels received a considerable amount of help from close friends in the industry. He decided to make a wheated bourbon and Pappy, who was already making bourbon in this style, shared recipes and technical tips (for example, wheat shouldn’t be cooked under pressure the way that rye is). Pappy also supplied him with Stitzel-Weller’s white dog so that he knew how it should taste after it left the still. Bill Sr. also received yeast samples from friends at Brown-Forman, Jim
Beam, and Heaven Hill. It was the expertise of bourbon’s old guard that helped Bill Sr. create something new and “kept him from going down blind alleys,” according to his son. The location for Bill Sr.’s business was on the site of an old gristmill and “really was the first ‘craft’ distillery after Prohibition,” Bill told me.
The new distillery started in 1953 and released its first batch of Maker’s Mark in 1958. When it hit shelves, Maker’s resembled the vanity project Bill Sr. had envisioned. The bottle was unique: square, stout, and dipped in red wax, which made it resemble fancier cognac bottles and distanced the brand from bourbon’s downmarket image. It was also relatively expensive, arriving at a time when most bourbon brands were slashing prices. Maker’s boldly targeted upmarket audiences, its first ad a two-page spread in the
New Yorker.
You can see a little bit of Bill Sr. in all of this: a defiant maverick who wanted his product to be seen as a principle as much as a product. He was putting it on par with cognac and scotch, which American consumers generally considered more exclusive and sophisticated.
But principle aside, there was very little profit, which came as no surprise for a product that had zero name recognition and was pricey. Its initial output was tiny, sold mainly in the immediate vicinity of the distillery and just profitable enough to keep the company from going under.
During this time, while Maker’s Mark was getting started, Bill Jr. received an engineering degree and went to work as a rocket scientist for Aerojet General on the Polaris missile system. When one of his motors failed during a test launch, he was fired. After that, he attended law school at Vanderbilt. He moved back to Kentucky after graduation to work in the family business.
The push-pull dynamic of a headstrong father-son duo was soon to emerge. Bill describes his father as a “products guy” who had managed to engineer a bourbon that was respected by a small community of connoisseurs. But one senses that Bill’s notion of success was more expansive—even in his mid-seventies he is restless and energetic, whirling his hands in the air and talking fast, as if his mouth can’t keep
up with all his ideas. He didn’t think the whiskey was living up to its full business potential and that his father wasn’t doing enough to push it on people. “His idea of marketing was sit on a rock and wait for Muhammad to come to that mountain,” as Bill describes it to me.
The elder Samuels put Bill in charge of finding more customers, and his role eventually grew to include advertising. Bill stayed focused on the class market, and in 1965 Maker’s Mark’s ran the ad it is still most famous for: “It tastes expensive . . . and is.” The ad was a jujitsu move, turning the brand’s biggest weakness into its strength. Bourbon doesn’t have to be expensive to be good, but Maker’s realized that this concept is lost on a consumer culture programmed to reflexively equate quality with price. They shrewdly didn’t push prices too high, though. Today it still generally retails for around thirty dollars and is very much an affordable luxury.
During the 1970s the brand slowly grew, from about six barrels per day up to nineteen barrels over the course of the decade. It was still small, but its growth coincided with a budding food movement around American culinary originals. In 1971, Alice Waters opened Chez Panisse in Berkeley, California, and around that same time
New York Times
food writer Craig Claiborne began championing “lost classics” from regions such as the Deep South. The message was one of getting “back to basics” and seemed aimed at the Space Age food crazes of the previous decade: Tang, TV dinners, astronaut ice cream. Slowly people began making the switch from iceberg lettuce to arugula, setting trends that would ultimately come to define bourgeois dining in the United States.
Tapping into this movement, Bill Jr.’s real masterstroke was his ability to get Maker’s onto airline beverage carts. People would try it for the first time while traveling, then ask for it at their local liquor stores, creating national demand. In 1980, the airline strategy caught the attention of
Wall Street Journal
reporter David Garino, who published an article headlined “Maker’s Mark Goes Against the Grain to Make Its Mark” on the newspaper’s front page. The article explained how the rural distillery was an anomaly that was finding success through a strategy that most people would consider missteps.
The story was a game changer. It sparked an avalanche of orders the distillery could barely fill, marking the beginning of double-digit growth over the next two decades.
Bill is regularly given credit for shrewdly evaluating public taste and steering Maker’s to its present success, but he simply credits it to lucky timing. What he does take credit for is that other bourbon makers followed suit by starting to sell upmarketed products. “Looking at our accident,” he explains, “the market caught on.” In 1984, the Ancient Age Distillery
*
(known as Buffalo Trace since 1999) released Blanton’s, a single-barrel brand and a standout. The success of Maker’s was certainly an inspiration, as was the rising popularity of single-malt scotches, which were what encouraged the use of the word “single” in the new offering (the term “single barrel” technically isn’t regulated, and some supposedly single-barrel brands are actually mingled from multiple barrels, for consistency’s sake, but most of the reliable brands note on the bottle the precise barrel the liquor came from). In 1992, Jim Beam responded to the new market by creating its excellent “small batch” collection: Knob Creek, Basil Hayden’s, Booker’s, and Baker’s. (“Small batch” refers to a brand whose flavor profile is created with a collection of barrels that is smaller than normal. Like “single barrel,” the term technically isn’t regulated and can be used on any bottle.)
Slowly, increased sales of “premium” bourbons to niche markets started to boost the profits of bourbon makers. However, sales of classic mid-tier brands—Old Forester, Wild Turkey, Evan Williams—remained relatively flat. There was a bourbon revival of sorts, but it wasn’t a tide that lifted all boats. The old stalwarts might have been excellent, but they were also reminders of bourbon’s blue-collar past during an era obsessed with luxury and exclusivity—the U.S. economy eased out of recession in 1983, and the trend for super-premium bourbon exploded around the same time that the movie
Wall Street
hit theaters. A big part of this new demand originated not from the United States but from Japan, where the economy was also surging and where whiskies, both scotch and bourbon, were
popular. Single-barrel brands sold for over $100 across the Pacific, which was a price no bourbon—not even a super-premium offering—could yet command at home.
In his 1980
Wall Street Journal
article, David Garino had also noted that potential buyers of Maker’s Mark were “drooling on the sidelines.” Bill Sr., however, insisted the brand should remain independent. Nevertheless, one year later the drinks giant Hiram Walker bought the company. It was a wholly owned subsidiary, operating mostly as it always had, but was now technically part of one of the industry’s biggest corporations. After that, it drifted from corporate umbrella to corporate umbrella, as brands under consolidated umbrellas tend to do. British drinks giant Allied Domecq acquired Hiram Walker in 1987, and eventually sold Maker’s Mark to Fortune Brands, a giant holding company that by this point was also the owner of Jim Beam. In 2011, Fortune Brands split and all the liquor that had once resided under it became part of what was known as Beam Inc. In 2014, Beam Inc. was purchased by the Japanese whiskey giant Suntory and became known as Beam Suntory. This is where Maker’s Mark now resides.
• • •
In 2010, Maker’s Mark sold one million cases for the first time. That, coupled with its residency within a multibillion-dollar corporation, has caused it to lose some of the craft appeal that originally drove its success. In 2014, the brand was actually pulled from a couple of trendy and well-known whiskey bars in Louisville and New York, Maker’s Mark master distiller Greg Davis told me. This means nothing in sales for the company now, but it is important for image, which can drive future sales. Speaking as the craftsman of a brand that has remained largely unchanged over the years, Davis confided that the pullouts definitely “hurt the soul a little bit.” Bill’s thoughts on the matter were similar: “We work hard to keep Maker’s a product rather than a brand, and it’s very hard. . . . We’re not as cool as we used to be, but we’re
so
authentic,” he said.
Around 2010, some of the earlier craft darlings of the modern
whiskey renaissance, distilleries like Stranahan’s in Colorado and Tuthilltown in New York, which makes the Hudson line of whiskies, began flirting with outside investors. This led to the inevitable question of whether or not these companies should still be considered “craft,” even though the potential buyouts wouldn’t immediately change their size or day-to-day operations. In terms of image, a buyout requires careful navigation. Bill Sr. in 1980 told the
Wall Street Journal
that his company should remain independent, then sold out to Hiram Walker one year later, the kind of move that undermines a brand’s credibility with connoisseurs but can also launch its success into the stratosphere by allowing access to better distribution channels and a bigger marketing budget. Attracting the investment needed for growth while cultivating an image of creative independence promises to be a looming issue for any new distillery navigating the touchy politics of today’s foodscape. When I ask Bill how this will affect distilleries of the nascent craft whiskey renaissance, he responds with a blunt reality of American business. “Oh, they’re all being built to sell out,” he says with a shrug.