A lot of people ask me where the bourbon industry is headed. And to help answer that question, I think it would be smart to take a look at where it has been.
Now, I touched on some history in the first chapter, but kind of stopped right after Prohibition. I’d like to pick it up from there, if you don’t mind.
As I said, bourbon took a big hit from Prohibition—it could have been the death penalty for us. But we picked ourselves up and, slowly and surely, put things back together and started producing quality, one-of-a-kind whiskey again. It took some time, about a year and a half, to get things running, but in March 1935, we completed our first run of whiskey and threw a party at the distillery to celebrate.
When my great-grandfather died, my Uncle Jere was already running things so the transition was smooth and that helped us move forward. Uncle Jere wasn’t really a distiller. Though he obviously knew the process backward and forward, he was more of a promoter and salesman—a marketer, though they didn’t use that word a lot back then. He really got us going again, opened up channels of distribution, marketed the heck out of the brand. Even though we had other bourbon brands like Old Tub and something called Cave Hollow (not sure who did the product naming back then), for all practical purposes, we were a one-trick pony at that time and that pony was Colonel James B. Beam Bourbon, which soon became simply Jim Beam Bourbon. For a long time, that was enough. It was a great product, still is, and America gradually agreed. Soon it was flying off the shelves, recording double-digit growth, and this helped lift the entire bourbon industry. From about 1950 to 1966, sales of the category grew and grew and eventually bourbon became the number one whiskey in the nation.
During that time, the company also began shipping more and more bourbon overseas. Seems during World War II, American GIs had been passing the bottle around to their English and French counterparts, to name a few. Sharing the American spirit. The seeds had been successfully planted, and those seeds took root. That helped our sales even more and soon we had to expand, add another distillery (hence the plant in Boston, Kentucky, Booker’s private laboratory.)
We rode the Jim Beam Bourbon horse hard, rode it as long as we could, rode it far and wide. But soon enough that horse got tired and started to get passed up. By the 1970s people were starting to look for other beverage options, and bourbon began losing ground to other spirits. The decline was slow at first, but eventually it picked up steam and soon it was undeniable; after a good 20-year stretch, we were heading in the wrong direction. Bourbon was old fashioned; been there, done that. Even the names of most of the brands reflected the position of the industry: Old Taylor, Old Fitzgerald, Old Charter. Everything about bourbon was old. Especially our customers.
What exacerbated the situation was what happened to Old Crow. For a time in the early seventies, it was a big brand, bigger than ours. Then something happened to the product. Conflicting stories on what, exactly. One story has it that they deliberately monkeyed with the recipe, watered it down some to make it go further so they could keep up with the demand. Another version has them losing the original recipe, which I admit sounds a little farfetched. (There’s only one copy of the recipe? No one has it memorized?) Anyway, it wasn’t the same bourbon; people noticed, stopped buying it, and when it went south it took a part of the category down with it.1
By the 1980s beer and wine (and their cousins, wine coolers; remember Bartles & Jaymes?) were riding high, and then along came vodka, and finally scotch and the single malts. Big change in the wind. Suddenly you haven’t made it unless you’re seen holding onto a glass of Scotland’s finest, nosing its peaty aroma, or asking for a martini, shaken not stirred, extra dry, with two olives. Not many people were asking for Beam, straight up, and the ones who did probably personally knew my great-grandfather.
So it was time to innovate, get creative, rewrite the book.
That’s easier said than done, of course. It’s never easy revising the game plan, especially one you’ve been following for about 200 years. But as I’ve mentioned, Booker, my dad, did it. To be fair, he wasn’t the only one in the industry to do it, there were others for sure, but Booker made the biggest splash with his own special bourbon, Booker’s, and in the process created the Small Batch Bourbons.
As I’ve mentioned, the Small Batch Bourbons—Booker’s, Knob Creek, Basil Hayden’s, and Baker’s—helped kick-start things, let people know that we were still around. They proved to everyone that we could keep up, be relevant. The most important people we proved that to was ourselves. Hey, we can change after all. Look at us, man! We’re good.
So Small Batch marked an evolutionary milestone for us. Sales were strong. Bourbon was back and growing, and starting in the late nineties, a real renaissance took place.
But instead of following that success up, you know what we did?
Hell, not much.
From the early nineties, when Small Batch was launched, until just a few years ago, there really wasn’t much in the way of innovation in the bourbon industry. As I just said, sales were solid, especially for Knob Creek, and that was good enough. All the different distilleries had their own version of Small Batch, so we were all doing okay, but . . .
There’s an expression I’ve heard in the accounting industry, “Things go bad before they go bad.” This means that while things might be fine for now, if you look down the road, the numbers are telling you they might not be as fine in a few years. I’m not saying that things were going to go bad in our industry, there’s no way you could predict that, but one thing I do know is that rather than wait for a storm to hit like we did back in the Old Seventies, we did something about it.
We got creative, did a little innovating.
Enter Red Stag by Jim Beam, the very first flavor-infused bourbon in our long, long history. Black cherry flavor to be exact. (Check out page 70 for its taste profile.) This marked a big change for us, and the category shook things up. To be honest, there were a lot of skeptics out there, and probably the biggest one of all was me. I admit when we launched the product a few years ago, I pitched a holy fit. I didn’t like the idea of flavoring bourbon at all, and I let my opinions be known. People in the industry knew what I liked to drink: Beam, straight up, maybe some water back. I’m a purist, classically trained, studied at the Juilliard of whiskey. Adding a flavor to the centuries-old recipe? Sacrilege and holy shit! What would the ghosts think? Booker will come back and start kicking ass. I didn’t even want to taste the product. But the brand people worked hard on me, flew down to see me, kept after me to try it. So eventually, I took a sip. Then I took another, and then one more and before you know it, it was all gone. Not bad. In fact, more than not bad; pretty good. Booker might even approve. I cleared my throat, looked at my empty glass. Need to play politician here, clarify my original position. Now, what I meant to say was. . . .
Red Stag by Jim Beam was a hit, took off a like a Kid Rock song going up the charts. (Red Stag by Jim Beam sponsored him, in case you’re confused by my reference.) This was what they call a watershed moment, a turning point for Beam Inc.
The product was important to us in a lot of ways: (1) We changed before we had to. We went out to market with something new, something different on our own, not in response to some problem or shrinking market. (2) We reached out to a whole new audience, people who might not necessarily be bourbon drinkers, such as women. (3) We broadened the shoulders of our flagship brand, Jim Beam Bourbon. People who liked Red Stag by Jim Beam might tiptoe over to the big dog, pet it, take it for a walk around the block, come back the next day, become friends. So it was all good. In fact, it was so good, that we added two more flavors: Honey Tea and Spice. More variety for more people to choose from. More flavors for bartenders to play with. A centuries-old category and a centuries-old company, getting all creative. Look at us now, brother.
But we didn’t stop there. Not this time. This time we understood that the consumer likes new things, like to see what’s out there. So in 2011, we came out with another new expression: Devil’s Cut. Killer name. Killer bourbon. This one’s got a pretty good backstory and I’m proud to say that I’m in it.
Years ago, back when I was maybe around 13, Booker was fooling around at the distillery, trying to make some wine, and he needed a barrel to age in it.
“Drive up to the dump room and get me an old barrel, hurry up,” he said, throwing me the keys to his truck. I was amazed, not that he was making wine at a bourbon distillery—Booker made everything at the distillery—but that he had just given me the keys to his truck. Like I said, I was 13. So I ran over to that truck before he could change his mind, threw it in gear, drove up to the dump room, and asked one of the workers to help me load a barrel into the back.
“You know, there’s a lot of good whiskey in that barrel,” he said after we were done.
I looked at that man. He was an old-timer, a whiskey veteran through and through, and I thought he had probably drank his lunch. That barrel was as empty as my pocket.
“There’s nothing in it,” I said.
“Hell, boy, look close, get your head in there.”
I didn’t budge. In fact, I started inching away, backwards. “Don’t see nothing.”
“Can’t see it with your eyes, you have to see it with your nose! There’s whiskey in there all right and a lot of it. It’s in that wood, Freddie. It’s hiding in there deep. The wood absorbs it and it stays there getting old and good. Got the best flavor. Can’t you smell it?”
I closed my eyes, took a sniff, got a good whiff. “Oh.” Suddenly I understood. Kind of.
“I’m going to give you another barrel, Freddie. Take it on home and put some water in it, put the bung back on it, roll it around for a while, sweat it, then set it upside down on a couple of bricks. Remember to put a pan under it. In a day or so, knock that bung out of it and you’re going to get a pan full of high quality bourbon.”
I studied that empty barrel. No bourbon, then bourbon. Just add water. This sounded like magic. “You sure about that?”
He rolled another barrel over to the truck and lifted it on in. “Hell, yes, I’m sure about that. Now go home and try it. You’ll thank me one day.” He started back to the dump floor but stopped halfway and turned. “Hey, how old are you now?”
“I just turned twenty-one.”
“Right. You and me both, boy. Listen, just to play it safe, don’t go telling your dad I told you this now. Tell him one of your cousins told you, Baker maybe, or you learned about this at school or something.”
“Yes, sir, I won’t,” I said, eyes still on those empty barrels.
So I went home with that extra barrel and did what the old-timer said: put water in it, sweated it, then set it up behind the shed in the corner of our backyard away from prying eyes. That first night I checked on it, stared at that barrel for a long time, said the Rosary, praying for the second coming of bourbon. A couple of days later, when I knocked the bung out, my prayers were answered: drinking whiskey flowed out of that once-empty barrel; that pan became full of it.
Fast forward about 40 years. I’m sitting in a meeting with our innovation team, kicking around ideas, looking for the next big thing. Someone asked me about growing up at the plant, what Booker did when he was at Boston, and that story came back to me, so I shared it. Wish I had sunglasses after I did, because so many light bulbs went off, I almost went blind.
Devil’s Cut was a hit. (See its taste profile on page 70.) A great-tasting whiskey that’s a little different. Wish I could remember that old-timer’s name. I’d give him a case (or two) for sure.
Devil’s Cut, Red Stag by Jim Beam—we keep moving forward. Not long ago we came out with a Knob Creek Single Barrel, in addition to the best-selling Small Batch version, and a Knob Creek Rye. More variety, more innovation, more choices for our customers; something new from a very old company. All good stuff.
And our sales have responded to what we’re doing. Thanks to our innovation and our premiumization (upscale brands), bourbon was the fastest-growing large category in the United States in 2011. That’s something the whole industry is proud of, something we can all brag on.
So, it’s working . . . and we keep working, no longer content to rest on our laurels. What’s next, I’m not sure. (Hell, I wouldn’t tell you if I knew anyway.) I imagine new flavors, new ways to finish our bourbons, maybe higher-end products, maybe not. We’ll have successes and we’ll probably have a few belly flops too. All I can be sure of is that whatever we finally come up with will be different and, hopefully, good.
I also know that any new products will remain true to our core values and our history. In other words, our integrity and our long tradition and sacred process will be protected. I’m going to make sure of that. I’m a Beam, and that’s my job.