Kentucky Bourbon: Part terroir, part amazing storytelling, part amazing product
Ken Lewis, Owner of New Riff Distillery, and Colleen Thomas, Bourbon Ambassador with the Kentucky Distillers’ Association, discussed “Talking Turkey About Branding Kentucky Bourbon” on Friday, November 18, 2016, in Newport, Ky. Pat Frew facilitated the discussion for nearly 100 attendees. Before they spoke, AMA Cincinnati President-Elect Travis Nipper had a chance to chat with them about Kentucky, the bourbon industry, and marketing.
@TravisNipper: What’s behind the resurgent spirit that was “our granddad’s drink” in the 1970s?
Colleen Thomas @KYDist: There are several factors behind Bourbon’s resurgence. A major catalyst in the early 1980s was a growing consumer interest in what they were drinking. The wine industry started promoting tastings, pairings, and wine clubs. They started publications that engaged the consumer, taught them about the product, made them connoisseurs. The Scotch industry took notice and started doing the same with their single malts. This movement fueled a demand for premium products and a deeper dive into the education side.
You have to credit (Jim) Beam for jumping in with special releases, small batch, and single barrel. At the same time, Bourbon brands like Maker’s Mark started investing in the visitor experience, pulling back the curtain if you will, and giving consumers a first-hand look at how Bourbon is made. Bourbon started making a comeback, and as we can see over the last 10 years, its popularity has skyrocketed.
Ken Lewis, @NewRiff: Increasing globalization creates interest in our native (and only) American spirit. Consumers seek out local and authentic products as globalization “homogenizes” what we consume. Americans have become increasingly sophisticated in their taste and knowledge creating a more elevated food and drinks scene. Coupled with the information age of internet and social media we are increasingly focused on what is genuine and “of place” (terroir). Bourbon speaks to these trends (and it tastes damn good!).
TN: Popularity and globalization certainly generate demand. With the proliferation of brands, how does a new or resurrected brand stand out or capture long-laden brand equity?
CT: In my time in this industry, I’ve seen hundreds of entrepreneurs starting out. It’s a tough business. The investment of time and energy, the mental acuity, the physical work, the long hours, the learning curve that goes into building or resurrecting a brand is absolutely extraordinary. Three main things should be in the “Building A New Bourbon Brand Bible”:
- You need a story. Consumers want an emotional connection.
- The “juice” has to be good. Period. A great label and a sweet story will sell one bottle. The juice will sell the second, third…tenth.
- You have to be honest. You can’t say it’s your great-grandfather’s recipe that you make from corn on your family farm if your great-grandfather never distilled a drop and you’re sourcing the whiskey. There are so many avenues for information, and the consumer is savvy, educated, and discerning.
KL: The product has to be good—marketing can only do so much, and like Colleen pointed out, the consumer is savvy and quick. They have access to the whole world of information to be able to call out a “bulls***” product. Then it has to have a real story–an authentic story of quality and passion–backed up by excellence in branding and product design. The spirits consumer, happily, is becoming more like a wine consumer. They are open to trial, looking for terroir in the largest possible sense, and willing to give “the little guy” who’s putting it all on the line a look-see.
TN: Taking the growth into account, is there room for new distillery market entrants in a centuries-old business?
CT: There is. We’ve seen a spike in the number of distilleries opening, new brands entering the market, and many new expressions of existing brands over the past five years. Modern innovation has allowed for differentiation, and smaller companies can be more nimble in shifting to meet demands for new, exciting products. Not all will be successful, and I suspect there will be quite a percentage of new companies that fall off as the market shakes out in the next few years.
KL: Absolutely! Today’s consumer is eager for new entrants. Even with a core product loyalty, the consumer is eager to sample emerging trend products and engage with an authentic story. Look at craft beer. Although the comparison only goes so far (as “big beer” makes a crappy product while our “heritage distilleries” make excellent products), still, careful innovation and “hands-on” distilling will resonate with today’s consumer who is leery of global producers. This extends to the world market where consumers are starting to break away from the Scotch hold on world whiskey consumption and are also supportive of small producers who rightly or wrongly have the image of creating a more “real” and “organic” product.
TN: What effect have super-premiums had on the changing demographics in the market – or vice-versa?
CT: Premium and super-premium brands have driven the growth of American Whiskey over the past few years. This can really be seen in the export market.
KL: As the owner of The Party Source, I’ve watched the whole super premium movement in spirits happen. Not only has it created the economics to allow the investment that both reflects and creates the bourbon boom but “premiumization” has created an aspirational market for younger consumers to flow into. We are what we drink; we drink brands that project our own aspirations and self-image.
TN: How do modern distilleries keep the regional brand and their individual brands relevant, retain long-time customers, and engage new audiences?
CT: Consumer engagement is a huge factor. Maker’s Mark Ambassador program and New Riff’s Ranger Program are two excellent examples of companies giving consumers “ownership” of the the brand and the brand experience. Innovative visitor experiences and access to the distillers who make the product are huge factors in creating brand loyalty.
Bourbon consumers want a uniquely personal experience with the brand. Meeting and talking to the people that make their whiskey, getting their hands dirty in the distillery, feeling like they have a voice that is heard– that is what drives that sense of ownership. In the Bourbon industry, it evokes a sense of family.
KL: To succeed, especially as a mid-size distillery, we have to be “kings” of our home market. We have to tweak our story and our packaging and “get out there”, have “boots on the ground” to engage with our consumers in person and on social media.
TN: How do distilleries compete and collaborate simultaneously to increase the size of the prize across the region?
CT: It is no secret that the brands are competitive. Each wants to increase their market share. But the beautiful thing about our industry is the collaboration to preserve the integrity and strengthen and promote the Bourbon industry as a whole. The distilleries on the Kentucky Bourbon Trail, for example, work together year-round to cross promote and provide the best consumer experiences individually and together as one tourism entity.
The best example I can give can be seen at Distilled Spirits Epicenter’s Moonshine University where they hold a 5-Day Distiller Course four times a year. Attendees fly in from all over the world to spend a week learning the ins and outs of the distilling business. The faculty is made up of the finest experts Kentucky has to offer, including Chris Morris, Master Distiller at Brown-Forman, among other professionals currently employed at various distilling companies. Why do they share their years of wisdom with what could be their up-and-coming rivals? In Chris’s own words, “If they are going to make it, we are going to make sure they do it the right way. It’s best for all of us.”
KL: As a new sizable distillery, I have received nothing but encouragement and support from craft and heritage distilleries along the way. The global bourbon producers recognize that smaller producers re-energize the base and educate and engage new consumers. A rising tide lifts all boats and the “big boys” see us as being effective ambassadors for bourbon in an authentic way they never can be. In addition, we are their “unpaid” research, development, innovation team that they have shown readiness to purchase to take to a next level that their distribution and marketing arms can achieve and the “little guys” cannot. At the moment there is only cooperation–no one has any desire to undermine anyone else. We are a far cry from the craft and big beer wars.
TN: What factors are influencing the heritage and tradition of bourbon and how are they being addressed?
CT: We have a new generation of distillers coming in. For a long time we’ve had more of a generational, family kind of tradition in the distilling industry. Now we see relatively younger, well-educated individuals with extensive backgrounds in chemistry and other sciences working with the products. This is a good thing! The challenge is to preserve the tradition while introducing modern innovation, and companies like Brown-Forman and Four Roses, among others, are excelling at it.
In addition, over the past few decades we’ve seen family-owned distilling companies with deep roots in Kentucky get acquired by global spirits companies. However, these companies put tremendous energy into preserving the integrity of the brand. The larger companies allow for more investment in and wider global distribution of Kentucky’s Signature Spirit, and this is a win for everyone.
KL: I think New Riff is a good example of what is happening generally in the bourbon industry.
We have complete respect of the great 200-year tradition that precedes us and only want to bring a “new riff” of our own to this great tradition. I see that same attitude in the largest, smallest, and newest of producers: we are privileged to inherit the bourbon tradition and want to be good custodians of it.
Innovation and enhanced storytelling (marketing) can play nicely in the same “sand box” with tradition and history. It’s in everybody’s economic interest to do so.
In addition to strategy and marketing, Travis Nipper also writes on topics of interest in various industries.