{"id":4996,"date":"2013-02-18T10:00:31","date_gmt":"2013-02-18T15:00:31","guid":{"rendered":"http:\/\/www.billdawers.com\/?p=4996"},"modified":"2013-02-18T14:26:53","modified_gmt":"2013-02-18T19:26:53","slug":"makers-mark-bourbonomics-101-and-a-lesson-in-supply-and-demand","status":"publish","type":"post","link":"http:\/\/www.billdawers.com\/2013\/02\/18\/makers-mark-bourbonomics-101-and-a-lesson-in-supply-and-demand\/","title":{"rendered":"Maker&#8217;s Mark, &#8220;Bourbonomics 101&#8221;, and a lesson in supply and demand"},"content":{"rendered":"\n<p><div class=\"e26b170012445c56d240655bdd03f7bf\" data-index=\"10\" style=\"float: right; margin:10px 0 10px 10px;\">\n<script async src=\"http:\/\/pagead2.googlesyndication.com\/pagead\/js\/adsbygoogle.js\"><\/script>\r\n<ins class=\"adsbygoogle\"\r\n     style=\"display:inline-block;width:300px;height:600px\"\r\n     data-ad-client=\"ca-pub-5595881567027133\"\r\n     data-ad-slot=\"8268618372\"><\/ins>\r\n<script>\r\n(adsbygoogle = window.adsbygoogle || []).push({});\r\n<\/script>\n<\/div>\n<br \/>\nI&#8217;m sure a lot of readers of this blog have been following the strange saga of Maker&#8217;s Mark and its &#8220;overlords&#8221; at Beam Inc. and their decision &#8212; followed by a reversal of that decision &#8212; to slightly reduce the alcohol content of the bourbon crafted on a gorgeous, relatively small plot of land in Loretto, Kentucky.<\/p>\n<p>The decision to dilute Maker&#8217;s was made because of a booming demand that wasn&#8217;t anticipated when the distillery made its plans six years ago for sales this year. (Maker&#8217;s is aged six years, so demand has to be estimated far in advance.)<\/p>\n<p>The Wonkblog at the Washington Post has a fascinating piece about this today:<a href='http:\/\/www.washingtonpost.com\/blogs\/wonkblog\/wp\/2013\/02\/17\/bourbonomics-101-what-the-makers-mark-dilution-debacle-says-about-corporate-strategy\/?print=1'>Bourbonomics 101: What the Maker\u00e2\u20ac\u2122s Mark dilution debacle says about corporate strategy | Wonkblog<\/a><\/p>\n<p>From that post by Neil Irwin:<\/p>\n<blockquote><p>Most companies would simply raise the price of Maker\u00e2\u20ac\u2122s until the market cleared. But Beam Inc. depends on Maker\u00e2\u20ac\u2122s Mark to be one of its mainstay products \u00e2\u20ac\u201d and if it raised the price too quickly, it could lose that status. Many higher-end bars now use Maker\u00e2\u20ac\u2122s Mark as their standard go-to bourbon for mixed drinks, and at many mid-tier places it is their standard premium option. If the price of Maker\u00e2\u20ac\u2122s gets too out of whack with other bourbons of similar quality, they might rethink that practice and turn to less pricey options. I\u00e2\u20ac\u2122ve already noticed a growing number of bars in D.C. using Bulleit bourbon, a bit cheaper and rougher on the finish than Maker\u00e2\u20ac\u2122s, as their standard bourbon for Manhattans and Sidecars.<\/p>\n<p>And if that kind of change happened on a large enough scale, it could cost Maker\u00e2\u20ac\u2122s its status as that go-to powerhouse brand that helps underpin a company that sold $3.1 billion worth of liquor last year.<\/p>\n<p>So you can see why it might have been a little wary about raising prices further. It also doesn\u00e2\u20ac\u2122t do if you have a \u00e2\u20ac\u0153power brand\u00e2\u20ac\u009d that people can\u00e2\u20ac\u2122t get hold of. Hence, the decision last week, now reversed, to reduce Maker\u00e2\u20ac\u2122s Mark from 90 proof to 84 proof (or 45 percent alcohol to 42 percent alcohol). It would stretch the company\u00e2\u20ac\u2122s existing supply of bourbon further without either increasing prices or having shortages.\n<\/p><\/blockquote>\n<p>As Irwin asks, &#8220;What now?&#8221; It&#8217;s not entirely clear what the distillers will do to meet demand, avoid shortages, and avoid pricing too many buyers out of the market. It&#8217;s already a blend, so they could add some younger whiskey to it, in theory, but that might be met with the same consumer backlash. <\/p>\n<p>Anyway, it&#8217;s sure an interesting business issue regarding demand and supply, not to mention branding.<\/p>\n<div class=\"e26b170012445c56d240655bdd03f7bf\" data-index=\"2\" style=\"float: none; margin:0px 0 0px 0; text-align:center;\">\n<script async src=\"http:\/\/pagead2.googlesyndication.com\/pagead\/js\/adsbygoogle.js\"><\/script>\r\n<ins class=\"adsbygoogle\"\r\n     style=\"display:inline-block;width:300px;height:250px\"\r\n     data-ad-client=\"ca-pub-5595881567027133\"\r\n     data-ad-slot=\"4374909701\"><\/ins>\r\n<script>\r\n(adsbygoogle = window.adsbygoogle || []).push({});\r\n<\/script>\n<\/div>\n\n\n<div style=\"font-size: 0px; height: 0px; line-height: 0px; margin: 0; padding: 0; clear: both;\"><\/div>","protected":false},"excerpt":{"rendered":"<p>I&#8217;m sure a lot of readers of this blog have been following the strange saga of Maker&#8217;s Mark and its &#8220;overlords&#8221; at Beam Inc. and their decision &#8212; followed by a reversal of that decision &#8212; to slightly reduce the&hellip;<\/p>\n<p class=\"more-link-p\"><a class=\"more-link\" href=\"http:\/\/www.billdawers.com\/2013\/02\/18\/makers-mark-bourbonomics-101-and-a-lesson-in-supply-and-demand\/\">Read more &rarr;<\/a><\/p>\n","protected":false},"author":1,"featured_media":4997,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false}}},"categories":[4],"tags":[1057,1058],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"https:\/\/i0.wp.com\/www.billdawers.com\/wp-content\/uploads\/2013\/02\/Screenshot_53.png?fit=157%2C127","jetpack_shortlink":"https:\/\/wp.me\/p1gN9R-1iA","jetpack_sharing_enabled":true,"jetpack-related-posts":[],"_links":{"self":[{"href":"http:\/\/www.billdawers.com\/wp-json\/wp\/v2\/posts\/4996"}],"collection":[{"href":"http:\/\/www.billdawers.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/www.billdawers.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/www.billdawers.com\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/www.billdawers.com\/wp-json\/wp\/v2\/comments?post=4996"}],"version-history":[{"count":0,"href":"http:\/\/www.billdawers.com\/wp-json\/wp\/v2\/posts\/4996\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/www.billdawers.com\/wp-json\/wp\/v2\/media\/4997"}],"wp:attachment":[{"href":"http:\/\/www.billdawers.com\/wp-json\/wp\/v2\/media?parent=4996"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/www.billdawers.com\/wp-json\/wp\/v2\/categories?post=4996"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/www.billdawers.com\/wp-json\/wp\/v2\/tags?post=4996"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}