Tag Archives: Diageo

Diageo: Perfecting The Art of Petulance

The arrogance of these corporations, and the  people that represent them, is, at times, jaw-dropping.

On Tuesday, 2 days after the award, I (James) took a phone call from Kenny Mitchell, Chairman of the BII in Scotland and Chairman of the Award Committee explaining the situation. To directly quote Kenny:

‘We are all ashamed and embarrassed about what happened. The awards have to be an independent process and BrewDog were the clear winner’

‘Diageo (the main sponsor) approached us at the start of the meal and said under no circumstances could the award be given to BrewDog. They said if this happened they would pull their sponsorship from all future BII events and their representatives would not present any of the awards on the evening.’

In my opinion, Diageo is stellar at making mostly good, but not great products. Guinness is a good, but not great beer. Tanqueray is a good, but not great, gin. They do have some great products, but these are the exception and not the rule. Look over their brands and see if you disagree with me.

Here’s the thing…people have been figuring out how to create great beers and great gins, and realizing that as a small producer of these products, they can fiddle and shape their recipes on a regular basis with a quick turn around.

Diageo has difficulty in competing against the new breed of brewers and distillers, in large part because the company is so large.  Change that needs to occur in a large organization is a slow, laborious process, getting buy-in from people who may not even be on site. Change is a long term problem for any large corporation.

So they play short term games. They brag about their silver medals, without telling you that twenty-two other brands won a silver medal at that event.  They bully Award Committees by threatening to pull supporting income.  They get “brand ambassadors” to become walking, talking commercials for their product. This is, in my experience in researching both the whiskey and beer industries, their short term solution for their long term problem.

Their other short-term solution? Remove the products that are actually great. Bushmills, also owned by Diageo, makes a stellar 21-year old whiskey. And I’ve heard from people in the industry that several people at Diageo wants to kill the product. Why? Because it’s expensive to create a high quality product, free of defects. And waiting 21 years before seeing only limited profit on the product seems counter-intuitive to many corporate-types. Other products that have high-quality but low to no profit margins are removed without fanfare.

Here’s the thing – Corporations want to make a lot money. This is the first order of business. Small businesses, know they don’t have the resources to compete against a corporation whose goal is to make lots of many, and they know they can’t compete on a mass produced scale – so these small businesses do something different. They provide a product that has to outshine the Diageo-type product that everyone is aware of.  And when these producers do create such a  product or service, they should be lauded for it, because producing  and selling a great beer, gin, or whiskey is hard fuckin’ work.

Simply put, to pull that award away because it wasn’t an operator that sold Diageo product, is both petty and childish, something I’m finding representatives from Diageo are getting quite good at.

<i>(h/t to Boing Boing and congratulations to Brew Dog.)</i>

The Bourbon Festival and the Missing Suits

There are some things you need to know when you talk about the current bourbon industry. Jim Beam is owned by Fortune Brands. Wild Turkey is owned by Pernod Ricard. Bulleit Bourbon is owned by Diageo. There’s a lot of money at stake in the bourbon industry, and multi-national corporations are more than happy to have a proven brand in their repertoire.

But if you’re a tourist exploring the whiskey trail in America, it’s unlikely that you will see many references to these corporations. Instead, you’ll be introduced to people like Fred Noe (pictured left), great grandson of Jim Beam. You’ll be encouraged to take the distillery tours and spend money at the giftshops strategically located at the end of each of these tours. You’ll be told about heritage and tradition, and made to feel as if you are “down home”. But somewhere in the back of your head, there will be this nagging suspicion that there’s something more here.

Perhaps it will hit you when you see the bottling lines fill up flasks of Canadian Club. Maybe something will ring when it is mentioned that bourbon sales are close to two billion dollars, and you think that that amount of money has to go somewhere. Because as charming of a town as Bardstown and the surrounding region is, it doesn’t look as if it’s the headquarters of a multi-billion dollar industry. Of course, I may be prejudicial, coming from the Seattle, home to Microsoft and Starbucks, and having seen just how much these companies have re-invested in their hometowns.

This is not to say that the people I talked to at the Bourbon Festival were not authentic. Quite the opposite was true. There is a huge community in Kentucky dedicated to bourbon, and who nearly worship the history of this whiskey. In fact, it’s this authenticity that I believe that the tourists to the area and fans of whiskey latch on to. The corporations behind these brands would be fools to put their faces out front, when the Fred Noes and the Samuel’s family (of Maker’s Mark) do a much more efficient job of selling their product.

As a side note, the Beam family does seem to be everywhere in Bardstown, even in other distilleries.

What caught my attention more than anything is just how “authentic” every one was. Whether it was a tour guide recommending mixing bourbon with Ginger ale, to Maker’s Mark pointing out on their tour that they hand dip their bottles, there was a concerted effort to make a connection to the people on the tours. It’s not a coincidence that nearly every bourbon distiller had barbeque sauce and scented candles for sale. The message being sent was clear: bourbon is for the average American family.

This approach to selling isn’t a bad thing. It is a business after all, and money must be made. But the underlying message I got from the bourbon festival (outside of the fact that there are really great bourbons being made), is that the industry is very aware of itself. What I mean by that is that the corporate suits who were very much behind the scenes at this festival must know that they can’t pull off authentic Kentucky Charm. But the folks down in Kentucky sure can.

What else did I learn?

  • Corn whiskey, right out of the still, smells remarkably like corn syrup. It does not, however, taste like corn syrup, but it’s still pleasant, albeit a tad rough around the edges.
  • I also learned that the fact that Jack Daniels is the best selling American whiskey is a bit of a sore point with the bourbon producers.
  • Bourbon and bread pudding were made for each other.
  • Ditto for sausage gravy.
  • It was noted by several people that Bardstown (where the festival was held) is unique for a small town in Kentuckky, due to the fact that it’s one of only a few remaining small towns that still have a “downtown”. Thanks Wal-Mart!

No one wanted to talk about rye. From what I could gather, several of these companies were caught by surprise by the recent rye revival. The question becomes, does a company invest in rye now, when in three to five years, rye’s popularity might be less than it it now? Watching a distillery make a change due to market demand is akin to watching a cruise ship make a left turn…i.e. it happens very slowly.

Quick note on the picture below. This is one of several buildings where they store the barrels of whiskey. The dark coloring on the bottom third of the building is mold.

Finally, I’ve found myself drawn to distillery tours for some reason. They are a tad hot, really noisy, but with the right tour guide, they are incredibly informative.

I’m planning on heading back next April, with the hope that I can see some smaller production lines and companies. What I think will be interesting is comparing these tours to the ones in Ireland and Scotland.