The State of Beam
2016 has been a busy year for Beam Suntory. There has been a regular addition to the Jim Beam lineup, new limited editions, age statements dropped in favor of NAS, discontinuations, and price increases. The later is what prompted me to write this post but not before cooling down after #Bookergate. I am not writing this post out of anger, but as a means to paint a picture of things to come. Lets start at the beginning of the year.
Two new LEs are announced in February 2016: Booker's Rye and Knob Creek 2001. Both garnered a lot of interest in the American whiskey communities.
Shortly after the Booker's Rye announcement a $300 SRP was confirmed. This news was met with a mixture of shock and disbelief. However this did not stop fans and opportunists from buying up every bottle available. I never personally saw a bottle on the shelf but have seen a few at high end bars if that tells you anything. It was named Whiskey of the Year by Jim Murray in 2016. In retrospect it would appear that Beam was testing the waters for higher prices in the ultra premium whiskey category. This will come into play a bit later but lets keep moving forward. Overall I reviewed this rye favorably but damn was it hot.
Beam also tested the waters by releasing three different batches of the Knob Creek 2001 with a SRP of $130. The bourbon community seemed to universally agree that this release strategy was mishandled. They could have spread out the releases and prevented bottles from sitting on the shelves. I came across a bottle in the wild a few days ago - nearly 8 months later. However for the most part this release was gobbled up and reviewed with high marks. I was not a fan personally.
Jim Beam Double Oak is released at the end of August as a new addition to their core lineup. September sees the announcement that Knob Creek Small Batch (9 Year, 100 proof) will lose it's age statement. This is following a statement from Beam in January stating that they had no plans to eliminate the age statement. Thankfully the Knob Creek Single Barrel (9 year, 120 proof) will maintain its age statement.
October saw the removal of the 1.75L offering of Old Grand 80 proof AND the discontinuation of Old Grand-Dad 114. The death of OGD114 has not been met with much fanfare. Where else can one find a 4 year old, 114 proof Kentucky Straight Bourbon Whiskey for around $25? Cruising social media yields plenty of results showing folks buying up cases of OGD114 for their bunkers. The month isn't over yet - union workers at two Beam plants in Kentucky went on strike. An expired contract, 60-80 hour work weeks due to increased demand, and disregard for seniority were cited as causes for the strike.
On December 8th via a customer newsletter Ace Spirits leaked Beam Suntory's plans to increase the price of Booker's from $50 to $100 and put the bourbon on allocation. Fred Minnick later confirmed the price increase and clarified that the number of batches per year would go down from 6 to 4. Minnick would follow up with tweets suggesting that industry insiders were applauding the price increase of Booker's and more would be following suit. Beam declares that Booker's was undervalued in the current market. This is very strange when you consider that bottles of Booker's (some batches from two years ago) are sitting on liquor stores shelves around the country.
This is a bold move on their part and it can only be assumed the endgame is to artificially increase demand by implying the juice inside the bottle is $100 good and decrease supply by 33%. Loyal fans are absolutely outraged and for good reason. This is possibly the greatest price increase of a bourbon and if it works a precedent will be set. Others distillers will follow and stupid prices will become more and more common on shelves. Beam is being very unapologetic about the price increase to the point that they are sending canned messages to outraged fans saying that they more or less hope we get over it and keep buying Booker's.
How is this going to play out?
- Beam has no plans to double the price of Booker's and decrease the number of batches. This is a ploy to clear old stock off the shelves around the country. They claim they decided not to make the changes after public outcry similar to Maker's Mark reversing their plan to decrease proof.
- Beam actually intends to increase the price of Booker's and decrease the number of batches. However due to public outcry they decide not to make the changes.
- Beam leaks the information that they are planning to double the price of Booker's and decrease the number of batches. The result is consumers clear the shelves at the current price. This sets the stage for the first batch of Booker's 2017-01 in January to be the only batch on shelves at the new $100 SRP. It goes quickly thus building interest and now consumers play the waiting game until Q2. Rinse and repeat.
Honestly I think Beam orchestrated the situation to achieve #3 above. I don't see scenarios #1 or #2 playing out but I suppose anything is possible. As a loyal fan of Booker's and all of its molten peanut butter funk I decided to grab a few bottles before the price increases. I'm not proud as I should have let it rot on the shelf. These will be my last.
Is Booker's worth $100? That all depends on what the market is willing to bear. Are consumers are willing to pay $100 for that bottle and the fancy box? Will the desired effect be achieved? Will the new price tag impress otherwise uninformed consumers? Will die hard fans continue to buy at the new price? Only time will tell.
Getting back to the big picture and moving past the Booker's shitshow it would seem that Beam is looking for aggressive growth and a piece of the LE market. Buffalo Trace and Four Roses have been dominating the LE segment for some years with no end in sight. Next year might see another Booker's Rye based on the number of rye barrels supposedly laid down by Booker Noe. 2016 has been a strange year..... Wild Turkey hired Matthew McConaughey as their new creative director. My guess is Beam Suntory went with George R. R. Martin.
Update: January 2, 2017 - Less than a month after the initial announcement of the Booker's price increase Beam has backed down.....sort of. Now consumers can expect to see the SRP in 2017 rise to somewhere between $70 and $75. Eventually the SRP for Booker's will be $100 but the increase will be gradual. The real question is, was this all part of the plan or is Beam really listening to their customers? Either way its a half measure and a poorly executed plan. A 50% increase is still a big middle finger to consumers in my opinion. Sticking to my guns on this one. Cheers.