Subscribe: Apple Podcasts |  Google Podcasts |  Amazon Music |  Blubrry |  RSS |  More

 

Bill sells the family name and moves on from Whisky.  Marjorie knew he wasn’t happy and told him to make whisky again.

Dave Young:
Welcome back to the Empire Builders Podcast. Dave Young here alongside Stephen Semple. We’re business consultants. We do storytelling. So anyway, you heard all that right? Can we do that as spoken? So as we do here, Stephen just whispered the name of today’s subject into my headphones through the other end of the internet. I’m familiar with it to an extent, to the extent that I’ve drunk it.

Stephen Semple:
That’s a good start. Yeah. So now we’ve narrowed it down to a liquid.

Dave Young:
Now we’ve narrowed it down to a liquid. It’s Maker’s Mark whiskey. I know that they’ve got an interesting brand story and I’ve probably heard a few bits of it here and there in the whiskey world that we’re both a part of, but I’m anxious to learn what you’ve learned and hear the rest of the story.

Stephen Semple:
Well, it’s a really interesting story because Maker’s Mark goes back a long ways. T. W. Samuel and Robert Samuels made whiskey for George Washington.

Dave Young:
Oh, no kidding. All right.

Stephen Semple:
Way back there. And then the family moved to Kentucky to start a distillery, and this distillery was passed down over the generations. And then a lot of the American whiskey history was impacted by prohibition because along comes prohibition and the distillery is shut down. And when prohibition was repealed, Leslie and his son, who are now fourth generation wanted to start it up again. But starting up a whiskey distillery is hard because there’s a long lead time. It’s not like I make whiskey and suddenly there’s whiskey. It’s I make whiskey, I put it in a barrel, it’s got to age a bunch of years, and then I have whiskey.

Dave Young:
Oh, yeah. What was their last name?

Stephen Semple:
Samuels.

Dave Young:
Okay. So that explains the logo on the bottle. It’s their Maker’s Mark, and it’s the letter S with a circle and a star, and then IV,

Stephen Semple:
Right. Right.

Dave Young:
Which is fourth generation, right?

Stephen Semple:
Fourth generation.

Dave Young:
That just all made sense to me. Okay.

Stephen Semple:
Yeah.

Dave Young:
I’m back on board. Promise I won’t interrupt you until the next…

Stephen Semple:
Until the next thought happens.

Dave Young:
I won’t interrupt you again until I do.

Stephen Semple:
So the other challenge that was also happening during prohibition was taste had also changed. And bourbon at this time was seen as a very lowbrow alcohol. Consumer’s taste for bourbon was absolutely fading. And look, a lot of it is because a lot of the bourbon that was being made was quite frankly pretty crappy. So Bill wanted to do something different than they had done before, something smoother. But the father Leslie didn’t want to change anything, like this was the family history and Leslie prevailed. So they were making the bourbon the way they had been doing for over a hundred years. And then they’re just getting things going again and World War II breaks out.

Dave Young:
Yeah.

Stephen Semple:
And shortages grind everything to a halt and they need to switch production to industrial alcohol, and there’s hardly any money in that. So Leslie, the father, dies. It’s 1943, and Bill’s on his own. The company’s 99 years old, and he shuts down the distillery and sells everything to a New York conglomerate along with the family name.

Dave Young:
Okay.

Stephen Semple:
So this is the reason why when it restarted, it did not restart in the family name. He sold the family name. He joins the Navy, and he goes and does a bunch of things, selling lumber. He does a whole pile of things. And as legend goes, he’s moping around not liking what’s happening in the whiskey business. And his wife kicks him in the ass and says, “You need to go start making some whiskey.”

Dave Young:
Oh, what a sweetheart.

Stephen Semple:
“Go make some whiskey.” So here he is. Here he is, this multi-generational distiller. He held onto the old recipe. So he still had it as a starting point. And by this time, there are very few independent whiskey distillers left. It’s amazing when we look at how many little independents there are today. At this point in the fifties, there’s hardly any.

Dave Young:
Yeah.

Stephen Semple:
And the bourbon industry, quite frankly, is on life support. Imports of Irish and Scotch whiskey have tripled. Canada Seagram’s is 20% of the US market. It’s the largest in the world. And to do something new, as we know, Dave, you got to make the mash, you got to distill the whiskey, and then you got to wait six years for the flavor to happen.

Dave Young:
Yeah. It’s got to sit in the barrels.

Stephen Semple:
Yeah. So how do you test recipes? Well, Marjorie, Bill’s wife, has a degree in chemistry.

Dave Young:
Okay.

Stephen Semple:
And they know they want to make something that stands out. But here’s the idea she comes up with, bake loaves of bread to see how the grains and the flavor are going to be. So they start baking bread and tasting the bread as a quick way to test how is the whiskey going to taste.

Dave Young:
Oh wow. Okay.

Stephen Semple:
Yeah. So they literally test over 150 loaves of bread, all sorts of different combinations. And one of the things that they decide to do is take out the rye.

Dave Young:
Okay.

Stephen Semple:
Because rye gives that spicy kick. And they use wheat instead, which is sort of not normal. But as we know, it still fits bourbon, as long as you’re 51% corn, you make the standard for bourbon.

Dave Young:
Right.

Stephen Semple:
So when they finally have it the way that they like it, they start distilling. And Bill invests $35,000 to buy Burks’ Distillery in Loretto, Kentucky.

Dave Young:
Okay.

Stephen Semple:
So they need to look at the bottling. They want something that stands out. And at the time, all the bottles look the same. All the bottles were pictures of an old man and the names were old whatever.

Dave Young:
Yep. Old so-and-so.

Stephen Semple:
Old so-and-so. They believed that the drinkers would not buy unless it was premium. Because again, remember the bourbon market was dying. It was seen as lowbrow, and they felt that there was an opportunity to make a premium bourbon, but it had to be packaged looking premium.

Dave Young:
Yeah. Yeah.

Stephen Semple:
So what was the signal you could put? So they wanted to signal high-end artisan. So she hand-dipped the bottles in the melted red wax, as you see in Maker’s Mark.

Dave Young:
Brilliant idea.

Stephen Semple:
She was also a collector of pewter. And what she noticed was collectible pewter had a mark on it. When you look at pewter, there’s a mark. So she creates a seal that looks like a mark.

Dave Young:
It’s a maker’s mark. You see it in pewter, you see it in porcelain, you see it in fine furniture. It’s often like in furniture. It’s usually a little brand that’s seared into wood, things like that.

Stephen Semple:
And made the name Maker’s Mark.

Dave Young:
Yeah.

Stephen Semple:
They couldn’t use the family name. So when they released, most bourbons sold for $4, and they priced Maker’s Mark at seven bucks.

Dave Young:
Yeah.

Stephen Semple:
Big premium. That’s a very bold move in a shrinking dying marketplace. And at first, sales are slow to start. It’s a challenge. It’s hard selling things at premium prices, especially when you look at whiskey. A big barrier is sampling. Like I find it myself. I go in to buy a bottle of whiskey and you look at it and go, ‘Oh geez, do I really want to, do I commit to a bottle?’ It’s kind of like, ‘Boy, it would be nice to, it’d be nice to try something.’

Dave Young:
Yeah, absolutely. And in the last four or five years with people doing tastings and all kinds of things, that’s become a little bit easier. You can always find a few people that you can get to taste something with you. Like yeah, you’d have to commit to buying that bottle that’s sitting on the shelf that looks different than all the other bottles that have this red wax dripping off the neck. And there’s something a little enticing about that, right? It gets your attention anyway.

Stephen Semple:
It does get your attention, but it’s also twice the price. There’s a little bit of a barrier there. So it’s the late fifties, early sixties, which is the golden age of travel. If you remember in those days, people dressed up to travel, just take a look at old travel pictures. And people got dressed up to fly on a plane. So it’s 1961 and they get Maker’s Mark to be served on some commercial flights, which does a couple of things. Not only is it crate exposure, but because travel at that time was glamorous, there’s the halo effect of that. So there’s the sampling, there’s the exposure, but the halo effect of it being served in this glamorous environment, and it gets tried. And someone from the Wall Street Journal tries it and writes it up.

Dave Young:
Oh, wow. Okay.

Stephen Semple:
And the phone blows up, so much so that they actually take out an advertisement in the Wall Street Journal talking about how they are running low. Please be patient. We’ll get this to you when we can.

Dave Young:
We’ve got to make it and put it in a barrel.

Stephen Semple:
But here’s what’s brilliant about that. They just told the world it’s in demand.

Dave Young:
It’s rare. Yeah.

Stephen Semple:
We’re sold out. This is so clever. It made me think of, going back to episode 55, Uncle Nearest, when they started to run out of whiskey in the early stages, they actually increased their advertising because they wanted people going to the store, asking for the whiskey and finding out it’s out of stock, and creating that buzz off, oh my God, this is really hard to get your hands on. This is rare. This is wanted, this is desired. It’s amazing how often we have customers who when they sell it, they go stop the ads. These guys sold out and started the ads.

Dave Young:
Yeah.

Stephen Semple:
Brilliant.

Dave Young:
This is not related to Maker’s Mark, but you and I have at different times in our lives, been members of networking organizations like BNI. You see it over and over again the same thing, right? Somebody joins BNI because they don’t have enough business, so they do some networking and they start getting referrals from people, and now they’re all of a sudden busier than they’ve ever been. And they drop their membership because they can’t handle all the business they’re getting. It’s like you have to figure out something else. You got to grow this business, right?

Stephen Semple:
Yeah.

Dave Young:
This is like shutting the engines of an airplane off once you’ve reached altitude.

Stephen Semple:
And what these guys are, is actually putting jet fuel in, right?

Dave Young:
Yeah. It’s like, oh, now it’s time to kick on the real engine.

Stephen Semple:
So by 1922, did I just say 1922? I meant 2022. Maker’s Mark became the bestselling bourbon in America and has also been credited with reviving the bourbon industry. The other thing that’s great, is Marjorie, who had a lot of great ideas on this, she was the first woman inducted into the Bourbon Hall of Fame. So she got great recognition for her contribution to Maker’s Mark, which is awesome. But the thing I thought that was really interesting was they knew there was a challenge with the price being higher. So they knew they needed to package it in that fancy manner, and so they looked to the pewter and porcelain and all those other things. But on top of that, they knew they wanted to get sampling, but not just any sampling. Remember the challenge was there were high prices and bourbon was seen as lowbrow. They tapped into that halo effect of the airline industry. But my favorite thing, my favorite thing was when they sold out running an ad basically saying, we’ve been sold out. Please be patient with us. What you know is that just made the phone ring more.

Dave Young:
Oh, Yeah. Yeah.

Stephen Semple:
But was absolutely brilliant because it created and reinforced future demand. And I just thought that that was so smart.

Dave Young:
You see that in a number of industries. That’s basically the Tesla model in some ways, right? It’s like, oh, you can’t just go buy one. And I don’t know what it’s like now. Do they have car lots full of Teslas or do you still have to get your name on a list and put a down payment on and…

Stephen Semple:
I don’t know.

Dave Young:
I haven’t bought one yet if you can’t tell. But I know that I know in the early days especially, yeah, it’s like, ‘Oh, I don’t get mine till February of next year, but I can’t wait.’

Stephen Semple:
Right. Yeah. And I said, there’s this big hesitation that when you sell out and things like that to turn the marketing off. And in fact, you should, like Uncle Nearest and these guys, you should keep that marketing going, put the foot on the pedal and tell the world, no, you know what? Because the thing is you’re now saying, everyone else wants me.

Dave Young:
After they did the sampling and got on airlines, I don’t know when it began, but I think their line is, that it tastes expensive because it is.

Stephen Semple:
That is their line. And I think that was their line right from the beginning, but I’m not entirely sure.

Dave Young:
Yeah.

Stephen Semple:
But yes, yes, they really leaned into the whole thing of owning the high end of the market. Yeah.

Dave Young:
And honestly, if you compare to some of the whiskey prices you see today, like seven bucks over four bucks or three and a half, not that big of a difference. Prices have gone up tenfold for most decent brands.

Stephen Semple:
Yeah.

Dave Young:
They’re middle ground I think if I’m not too far off the Maker’s Mark.

Stephen Semple:
Today they are, but when they came out, they set the new high end.

Dave Young:
Yeah. And then the just explosion of craft distilleries. The thing about it is, you can’t operate a big brand like this now, and you have to consider Maker’s Mark now a big major…

Stephen Semple:
Bestselling bourbon in America.

Dave Young:
Yeah.

Stephen Semple:
Yeah.

Dave Young:
And so they’re not going to experiment other than with special releases. They’re not going to change this to mess with any flavor profiles. It gives other craft distilleries lots of room to dance around the fringes and come up with stuff that’s all kinds of unique.

Stephen Semple:
They contributed to turning around and saving the bourbon industry. It also takes a lot of guts. You’re in a space that is considered lowbrow. You’re in a space that’s dying off. You’re in a space where there’s fewer and fewer. Think about all of those things, and then you come out and go, here’s what we’re going to do. We’re going to release a bottle that’s almost twice the price. That is bold.

Dave Young:
And to have the vision to just lean hard on it, right?

Stephen Semple:
Yes.

Dave Young:
To say, okay, well yeah, we’re going to do a bottle that’s more expensive. Red wax. It’s pretty, but it’s not free.

Stephen Semple:
Yeah.

Dave Young:
There’s an expense to hand dipping every bottle in red wax. That’s not a machine process.

Stephen Semple:
Yeah.

Dave Young:
So it’s such a good story in positioning and shooting for that little edge of glamour and exclusivity. Just about any business could take something from that and go, okay, what do we do? How do we look? How do we act to make ourselves distinct, to make ourselves stand out? You may not have, like we’ve talked about the old unique selling proposition stuff and there’s really not a unique selling proposition, but you think about what you can do to make yourself stand out.

Stephen Semple:
Yes.

Dave Young:
I don’t consider the red, the price, or all of that to be a unique selling proposition. It’s here’s what we did to be noticed and to be remarked upon as, ‘Oh, well, I wonder what all the fuss is about.’.

Stephen Semple:
Yes.

Dave Young:
‘I think I’ll try it.’ I’m on an airplane and I see them handing it out to other folks that are fancy like me, and maybe I’ll try it on my next flight.

Stephen Semple:
Yeah. And they also looked outside their industry. The inspiration for the Maker’s Mark came from her pewter collection.

Dave Young:
Yeah. Yeah.

Stephen Semple:
And so often we talk about innovating, don’t look around your industry, don’t look around your area, look outside. And then they brought that idea across. And I actually think that the bottles are still hand-dipped, not machine-dipped.

Dave Young:
I think that’s right, but I’m not completely sure. I recall seeing videos of people in their early days, maybe even as little as 10 or 12 years ago. They would have basically customers and fans come in and you could hand dip a bottle and keep it, but you would be helping with their production runs.

Stephen Semple:
Right. That’s kind of cool.

Dave Young:
That may be part of their experience at their distillery. Yet today, I’m not sure, I haven’t been. But I have seen videos of people dipping their own at the factory, committing to buying a bottle of Maker’s Mark and then hand dipping it into some wax themselves.

Stephen Semple:
That’s cool. That’s cool.

Dave Young:
So now you take that home and it’s like, yeah, you may not ever open that bottle because you hand-dipped it, so now you’ve got to buy two.

Stephen Semple:
Exactly. Exactly. Right.

Dave Young:
Or you put that one on the mantle. If you’re going to drink Maker’s Mark, you go down to the liquor store and you just keep buying it from there, right?

Stephen Semple:
That’s exactly what you would’ve done as well.

Dave Young:
This is really well for the brand.

Stephen Semple:
It really does. It really does. Here’s the other part that I really like. I also really like that Marjorie, who was an inspiration in a lot of these things got the recognition because so often women don’t in terms of being inducted into the Bourbon Hall of Fame. So I was really happy when I saw that.

Dave Young:
Can I put in a little plug for whiskey?

Stephen Semple:
Sure.

Dave Young:
Next time you’re in Austin, Texas. As you may or may not know in previous episodes, Stephen and I have talked about whether we’ve talked about the fact that we’re both whiskey sommeliers from the Whiskey Marketing School. And one of the things we have here in Austin, Texas is the Whiskey Vault where we’ve got 3000 bottles of whiskey including a bottle of Maker’s Mark. I’m pretty sure it’s in there. And as you mentioned earlier in the episode, Stephen, if you ever just want to have a taste of something because you’re not sure, that Whiskey Vault is actually the reference library for our whiskey sommeliers. So you and I can just wander in there and have a sip of Maker’s Mark and see if we like it better than old so-and-so. And so that’s always fun. And if listeners ever want to see that vault, get in touch with me. We’ll figure out how to make that happen. We do little mini-educational events all the time there, so we could arrange that for you if you’re ever in Austin, Texas.

Stephen Semple:
So do you want to share your email address?

Dave Young:
DaveYoung@wizardofads.com is fine. Or DaveYoung@wizardacademy.org. Either one of those.

Stephen Semple:
Okay. So if they’re in Austin, they can reach out to you and taste a little Maker’s Mark. And I also know there’s some Uncle Nearest in there too.

Dave Young:
There is some Uncle Nearest in there. And a lot of people bring an offering when they come like they’ll bring a bottle of something that they know we maybe probably don’t have. Although with 3000 bottles, we’ve got a lot. But man, there’s so much going on in craft distilling these days that it’s hard to keep up even 3000 bottles.

Stephen Semple:
Well, thank you for that offer, Dave. That’s awesome.

Dave Young:
Yeah. Yeah. And what a great story. Thank you for sharing that here on the Empire Builders, Maker’s Mark. And explained the Maker’s Mark, it all makes sense now. When you look at the bottle, it’s like, ‘Oh, there’s the mark, there’s the wax. Let me have a taste.’.

Stephen Semple:
And why it’s an S. All right, awesome.

Dave Young:
Perfect.

Stephen Semple:
Thanks, David.

Dave Young:
Thank you. Thanks for listening to the podcast. Please share us. Subscribe on your favorite podcast app and leave us a big fat juicy five-star rating and review. And if you have any questions about this or any other podcast episode, email to questions at theempirebuilderspodcast.com.

Latest posts by Stephen Semple & Dave Young (see all)