retail news in context, analysis with attitude

by Kevin Coupe

Last week, the company that manufactures Maker's Mark bourbon announced that because of a raw materials shortage, it would begin watering down the product, reducing it from 45 percent to alcohol to 42 percent alcohol, without, it said, affecting the taste.

In the blog post acknowledging that the move was risky, Chairman emeritus Bill Samuels Jr. said that he hoped people would "allow us to prove that we didn’t screw up your whisky."

He got that wrong. Almost as wrong as he got the whole decision-making process.

Over the past week or so, the outcry from committed Maker's Mark drinkers was enormous - they did not believe the raw materials shortage story, they thought the company was trying to pad its bottom line, and they were willing to drink other bourbons to teach Maker's Mark a lesson.

The outrage reached such a fever pitch that over the weekend, the company posted the following letter on its site:

Dear Friends,

Since we announced our decision last week to reduce the alcohol content (ABV) of Maker’s Mark in response to supply constraints, we have heard many concerns and questions from our ambassadors and brand fans. We’re humbled by your overwhelming response and passion for Maker’s Mark. While we thought we were doing what’s right, this is your brand – and you told us in large numbers to change our decision.

You spoke. We listened. And we’re sincerely sorry we let you down.

So effective immediately, we are reversing our decision to lower the ABV of Maker’s Mark, and resuming production at 45% alcohol by volume (90 proof). Just like we’ve made it since the very beginning.

The unanticipated dramatic growth rate of Maker’s Mark is a good problem to have, and we appreciate some of you telling us you’d even put up with occasional shortages. We promise we’ll deal with them as best we can, as we work to expand capacity at the distillery.

Your trust, loyalty and passion are what’s most important. We realize we can’t lose sight of that. Thanks for your honesty and for reminding us what makes Maker’s Mark, and its fans, so special.

We’ll set about getting back to bottling the handcrafted bourbon that our father/grandfather, Bill Samuels, Sr. created. Same recipe. Same production process. Same product.

As always, we will continue to let you know first about developments at the distillery. In the meantime please keep telling us what’s on your mind and come down and visit us at the distillery. It means a lot to us.

Now, there's no question that the Maker's Mark folks have to get some credit for being willing to back off its announced decision, though it would have been a completely unsustainable strategy to ignore all the protests and forge ahead. However, Maker's Mark also has created suspicion about its commitment to a) the quality of its product, and b) its longtime customers.

Last week, we had an email on MNB from a Maker's Mark "Ambassador," who had for years enjoyed his role preaching the gospel of why his bourbon was getter than other bourbons ... and who, in the face of the watering down, planned to change brands. It was practically a case study in how to disenfranchise a customer, and we continue to get emails on the subject. For example:

Your response to the comments of the Maker’s Mark Ambassador reminded me of one of the business building rules of David Ogilvy that I read years ago in Fortune magazine… “Stop cutting the quality of your products in search of bigger margins.  The customer always notices – and punishes you.”

And from another reader:

While I am NOT a bourbon drinker I DO buy it for people as gifts…I used to buy Maker’s Mark. Now, based on the ‘enlightenment’ from the ex-Marker’s Mark brand ambassador, I will purchase W.L. Weller and/or Blanton’s.

This all adds up to a powerful lesson in brand management and brand equity, and in how fragile these things can be when the people "in charge" behave in a way that seems to ignore their customers' priorities.

Great brands share something important - the fact that customers feel a sense of ownership.

Brand managers forget this at their own peril. It is an Eye-Opener.
KC's View: