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Thread: Proof changes

  1. #11
    Advanced Taster
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    Re: Proof changes



    It's hard to get new items approved, because it takes up store space.

    By using the old product, they do none of this and the new version gets into the stores much quicker and into a lot more retail outlets w/o much problem or work or convinicing.

    one of the tricks of the trade.
    Tim
    [/QUOTE]

    But in many instances, they are relabeling, designing new bottles, new artwork, new marketing material, new "point of purchase" material for the distributors to pass on to the retailers, and reeducating the distributor. This isn't necessarily easier, or inexpensive. And, wouldn't the UPC change as well, (maybe not) to reflect the difference? Some stores do have proof listed on their shelf pricing.

  2. #12
    Bourbonian of the Year 2010 and Guru
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    Re: Proof changes

    No, the UPC hasn't changed, there is apparently no need to get a new UPC every time you change label designs or proof, but probably only for a new product, ie. the old product is staying and a new product will join it on the shelf. I haven't checked (someone do this for me) but I'm guessing that there is no need for a new UPC for every vintage of EWSB as the old one should be off the shelf and a new one replacing it.

    As far as the labels are concerned the label applications have become quite automated. They can apply for and check the progress of all new labels online.

    The bottles, artwork, promotional materials and such are most likely handled by the advertizing department (or a separate agency). This department is most likely paid on an annual basis to cover a large range of duties and having them do one more job probably costs little if any more. Of course the new bottles wil replace the old bottles and probably cost about the same, they probably stopped printing the old promotional materials and artwork long before the change and had already run out.

    As far as the retailer (and the customer) go they pretty much get the shaft. The retailer orders the same stock number as before, gets some strange bottle that they didn't want, calls the distributor and gets told that it is now in a new bottle and at a new proof and that they can't get the old one any more, if they don't want it they can send it back. The customer hopefully gets to at least see both botles side-by-side and can ask the retailer what is going on and can grab up all of the remaining old stock as well as a bottle of the new stuff to try (that's what happened to me).

    Of course the retailer may not have gotten such a nasty shock, the sales rep may have let them know about it in advance (hoping to get a big sale from a store afraid to run out of a popular bottling).

    I'm really trying hard not to sound too angry here. It's a business and they are doing their best to make both their customers and their accountants happy. It could be much worse there could be no more 10yo whiskey coming out of WT, and that would be much more of a shame than a reduction of proof.

  3. #13
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    Re: Proof changes

    you have costs for a reformulated item wether it is considered "new" or "reformulated"

    there is limited shelf space, so there is a huge difference (and cost) between changing an existing product and asking to add a new product.

    there are high costs for new products. things like "slotting" and "new item" fees.

    Then you still have to get the item approved to be sold thru distributors and retail chains. You're sales people have to go get it approved all over again.

    why take the risk to do all this if you have a product that is not selling quite well but has a large distribution base?

    Saves time and $$$ to repackage it and see if you can increase sales.

    If you had to change the UPC everytime the label or formula changed, it would be a nightmare.




    But in many instances, they are relabeling, designing new bottles, new artwork, new marketing material, new "point of purchase" material for the distributors to pass on to the retailers, and reeducating the distributor. This isn't necessarily easier, or inexpensive. And, wouldn't the UPC change as well, (maybe not) to reflect the difference? Some stores do have proof listed on their shelf pricing.

  4. #14
    Bourbonian of the Year 2002 and Guru
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    Re: Proof changes

    WTRR is a pretty new brand. I don't remember exactly when it was introduced, but it was only a few years ago. I think they looked at the marketplace, looked at the brands that were having success in the premium segment and adjusted accordingly. The proof change accompanied a complete package overall and my conclusion is that they were repositioning the product to compete more directly with Woodford Reserve. Although Knob Creek is 100 proof, most of the products in that segment are lower than 101, yet higher than 80, so in the vicinity of 90.

    Since WTRR is so new, and hence small, I don't think taxes were a consideration. That's the same reason they didn't add a 90 proof to the line rather than eliminating the 101 proof.

    When Jack Daniel's lowered its proof a year or so ago, that was all about taxes. Unlike WTRR, JD is a mature brand and big. The proof cut saved the company more than $13 million a year in Federal Excise Tax alone.

    The Federal Excise Tax on spirits is $13.50 per proof gallon. A "proof gallon" is one gallon of 100 proof whiskey. Since the tax rate is tied to proof, lowering the proof lowers the amount of tax you have to pay. Eighty proof is the minium allowed for a whiskey. You can make a lower proof product but you have to label it "diluted."

  5. #15
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    Re: Proof changes

    I agree with you about why they repackaged.

    the back of the RR bottle does call it a limited release or something like that. It is a great product that may have been lost on the shelf. The bottle text is hard to read, and the Turkey is almost invisible.

    The bottle is also more like the 80/101 proof, as opposed to RB and KS, lending itself to present a 'cheaper' presence on the shelf. It may have been lost between the cheaper 80/101 and the more expensive RB and KS.

    as a side thought, how do you see increase in demand for spirits and current inventories affecting present and future products?

  6. #16
    Bourbonian of the Year 2002 and Guru
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    Re: Proof changes

    Assuming even steady growth, supply will remain tight because producers aren't rushing to increase production by more than modest amounts. They overproduced 30 years ago and won't make that mistake again if they can help it. Since supply will remain tight even with modest growth, an unexpectedly big burst of growth could create real scarcity, but most people don't expect that to happen.

  7. #17
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    Re: Proof changes

    I was just reading some interesting export reports at the discus site, which is the Distilled Spirits Council of the United States.

    http://www.discus.org

    If I am reading them correctly, in Jan-June '04 vs. Jan-Jun '05

    Bourbon export volume fell by 8.7% but the bourbon export value($) grew by 13.5% so they sold less but made a lot more .anyways I find this stuff interesting.

 

 

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