Business
12:41 pm
Sun February 10, 2013

Maker's Mark COO Rob Samuels: Extremely Short Supply Led to Cut in Bourbon's Alcohol by Volume

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Credit Matt Lucht/Creative Commons

Maker's Mark was first made in the 1950s, but the family behind the bourbon has been distilling in Kentucky longer than Kentucky has been a state.

Bourbon is an industry that makes a big fuss over tradition, particularly the premium brands—something the Samuels family claims to have created. Now, the news that Maker's Mark is lowering its alcohol by volume level by three percentage points—from 45 to 42—to meet demands has set the spirits-loving segment of Twitter ablaze.

On Sunday morning, Maker's Mark chief operating officer Rob Samuels—a scion of the bourbon-making family—discussed with WFPL the reasons behind the change. 

What led to this decision?

The bourbon category has accelerated tremendously, and as the bourbon category has grown. That has accelerated Maker's Mark growth to a point where the demand for Maker's Mark is significantly greater than our distillery's ability to produce it. With demand greater than supply, we thought about many, many different options and the way that we've decided to extend our supply to ensure that there are not more out of stock shelves across the county with liquor stores and bars is to slightly reduce the alcohol volume.

Through a slight reduction, that allows us to maintain exactly the Maker's Mark standard taste profile, as we've validated with consumers and with our own Maker's Mark tasting panel at the distillery in Loretto, Ky.

Nobody here with our team at Maker's Mark envisioned six, eight years ago that the growth would be at the level where it is today, which is significantly faster growth than the brand had experienced through the '80s and '90s and early 2000 years. The growth is far ahead of what we envisioned. As a single source of supply—which means we don't buy whiskey or bring whiskey in from the outside—we're left with only the bourbon that we produce at our historic national landmark distillery here in Loretto, Ky.

So people are having trouble getting Maker's Mark anywhere now?

Over the last 100 days there have been many instances where our distributors, retailers, bars—there have been periods where the brand's not available across most every state in the country. For instance, here in Kentucky through November in December, there were a couple of sizes that were completely out of stock—not available.

Spoke to a bartender who was very upset with us, because as they opened their new hotel and bar in South Beach didn't have Maker's Mark—wasn't available through the distributor. The phones have been ringing off the hook over the last three or four months from most every city in the country where Maker's Mark is not available on the shelf, as far away as California and as close to home as the package store five minutes from the distillery.

One of things bourbon fans like about higher-end bourbons is that it doesn't change. How concerned are you about a blow back from Maker's Mark fans?

We're confident that through maintaining the taste exactly to our standard—that's paramount, that's what means most to us, that's what means most to our consumers. The questions and concerns pale in comparison to the feedback that we've received with the shelves being empty.

We've been very careful and spent 100-percent of the time focused on maintaining consistency and taste—and we think we've done that. Our tasting panel at Maker's Mark has confirmed that, as have many, many consumers that we've shared it with.

Bourbon has to be aged a certain number of years, right? You can't just ramp up production now and put bourbon on the shelves immediately.

Absolutely. Maker's Mark, at our distillery we actually age to taste. It's the tasting panel, at Maker's Mark, they tell us when the barrels of Maker's Mark are fully mature and ready to bottle.The seasons vary—intense summers, intense winters will speed up the maturation process a little bit; mild summer, mild winter will slow it down. Under-aging is bad; we think over-aging is actually worse. One of the ways that many other distilleries can extend their supply is through a slight reduction in time spend in the barrel. That's not an option for us, because we know through the many, many years of producing at Maker's Mark, that we don't land on the Maker's Mark taste profile without a minimum of six full summers in the barrel, through the intensity of six summers.

How soon does the change to the alcohol by volume happen?

It's happening now. In addition to this transition, we're also increasing our distillation on site at Maker's Mark to support growth over time. But again, as you mentioned, what we produce today within the distillery comes out of the barrel on average in six to six-and-a-half years.

What is demand like now with the bourbon industry as a whole?

Premium bourbon in particular is growing at an unprecedented level. American whiskey and bourbon as a category for decades was the most sluggish, tired category within all of spirits—and that's changed dramatically. In 2012, in this country bourbon sales were measured to grow at seven-and-a-half percent, which is significantly faster than the rate of the category. And it's premium bourbons that are driving the majority of the growth—and it's the bourbon culture that is taking root in a lot of the big cities around the country. You see it with bartenders creating cocktails that showcase handmade bourbon with their own handmade creations, you see it with chefs who are choosing bourbon to incorporate in their creations.

Maker's Mark has plenty of history behind it. Can you talk about that?

My grandparents, when they set about creating Maker's Mark with their unique vision and dream, it was very much about creating a unique and distinctive taste profile—a soft yet full-flavored and balanced taste profile, opposed to the traditional rough blow-your-ears-off cowboy whiskeys that had defined the industry. As he set about creating his unique taste profile, it was all about the taste, not at all about the proof. And we've been able to maintain exactly the taste profile that our founder created and ensure that we can extend our supply so consumers don't experience out of stock shelves as they have over the past 100 days.

There's still, with this transition, an alcohol volume that will allow us to maintain the exact same taste profile that's defined Maker's Mark since the inception of the brand.There's still more demand than supply. We don't have anywhere near the supply to meet the demand, for instance, within export markets. We've prioritized here within the U.S.

The Samuels family is still deeply involved in Maker's Mark, but the brand is owned by Beam Inc. Was this a decision made locally?

It was.

Update 12:30 p.m.: Monday: Samuels' father and the company's chairman emeritus, Bill Samuels Jr., has issued a statement.