Real Deal or promotional gimmick

[smokinjoe]

Here's something that's apropos for this discussion. It's from the Four Roses Mellow Moments June eNewsletter, from Jim Rutledge:

"...By the time you receive this letter Four Roses distillery operations will be shutdown for our summer maintenance program. Since we operate our distillery 24/7 throughout the operating season, with the exception of Christmas Day, our shutdown periods are longer than many distilleries. This year we will be making an inventory adjustment so we will be down even longer - starting distillery operations back up in mid-October. Due to the nature of our business - distill today and bottle in 2015 to 2020 and beyond - we generally over produce slightly and then make inventory adjustments for one or more years, when necessary. We run in cycles like this because if we underestimate future demands we can't make up the shortfall of an "8" year-old Bourbon "today"..."

[camduncan]

Have you tried Red Slag ... er ... Red Stag yet?

I hope this is not a trend ... run out of the good stuff but keep pumping out the odd ball stuff ...

I doubt Red Stag will make its way Downunder, but then again, we seem to attract all maner of weird bourbons (did I mention Slate?) :skep:

I'm only speculating here, as my family hasn't been part of the liquor industry for several years now... I can only conclude that KC wasn't a big performer here, and was pulled from our market by Beam (possibly in anticipation of the current shortages) to better service the domestic US market. Why they chose to replace it with the Port added stuff 4 or 5 years ago is beyond me though. Personally, I'd rather see us getting a product like Old Grandad.

I took a bottle of the Jim Beam Small Batch to last years Sampler, and the general consensus was that it was 'ok', but not as a Knob Creek substitute.

[cowdery]

Here's something that's apropos for this discussion. It's from the Four Roses Mellow Moments June eNewsletter, from Jim Rutledge:

"...By the time you receive this letter Four Roses distillery operations will be shutdown for our summer maintenance program. Since we operate our distillery 24/7 throughout the operating season, with the exception of Christmas Day, our shutdown periods are longer than many distilleries. This year we will be making an inventory adjustment so we will be down even longer - starting distillery operations back up in mid-October. Due to the nature of our business - distill today and bottle in 2015 to 2020 and beyond - we generally over produce slightly and then make inventory adjustments for one or more years, when necessary. We run in cycles like this because if we underestimate future demands we can't make up the shortfall of an "8" year-old Bourbon "today"..."

This sounds like they are adjusting their inventory down, not up.

[smokinjoe]

This sounds like they are adjusting their inventory down, not up.

It sure does. I find it interesting they have the need to do so, despite increasing their distribution into so many new markets. I would have not been surprised if they had adjusted the other way, considering.

[cowdery]

Even in a generally up market you might have to adjust down in any given year but, yeah, this surprises me a little. I'm sure they're still projecting growth, but maybe just not quite so much.

[OscarV]

I wonder if 4R's is seeing the Coor's effect happen to them in the states that they have expanded to in the last couple of years?

When Coor's was available only on the west side of the country everyone thought it was the greatest beer ever.

But when they went national and eveyone tasted it and it was always on hand at the local store it lost it's mistique and was just another watered down beer.

[jburlowski]

Or since they are trying to introduce a super-premium into new markets, they may be feeling the impact of the recession.

[cowdery]

One of these days, I want to get into the modeling with somebody, to get a more in-depth understanding of how this planning is done. Although it takes six years to make a six year old whiskey, you can calculate what's in the pipeline and let the product go a little older or a little younger from year to year, to keep inventories from getting too fat or too lean.

On the other hand, a senior executive at Jack Daniel's once said to me, "we really have no idea but we assume we're going to keep growing, so we increase production by about five percent a year."

A shortage is to some extent a choice, in that KC saw this coming and might have managed it through allocation. In that sense you could say the shortage was manufactured, but that doesn't mean it's not a real shortage. It's just that having it happen in this particular way was a choice.

One thing that, I think, undermines their positioning is this idea that the currently-aging whiskey magically becomes Knob Creek precisely on its 9th birthday. In whiskey as in people, maturity isn't just a number.

[smokinjoe]

"In whiskey as in people, maturity isn't just a number."--Chuck Cowdery

Dang, Chuck. You should trademark that line.

:toast:

[StraightBoston]

Been there, done that, got the T-shirt (in the mail, today.)

No Knob Creek shortage here -- still working my way down a 4- or 5-year-old bottle that's in no danger of being first in line to be emptied between now and November. (Though I will likely reuse the shipping tube from the shirt for trading!)

[Bourbon Geek]

One of these days, I want to get into the modeling with somebody, to get a more in-depth understanding of how this planning is done. Although it takes six years to make a six year old whiskey, you can calculate what's in the pipeline and let the product go a little older or a little younger from year to year, to keep inventories from getting too fat or too lean.

Chuck, I'd be glad to kick this topic around with you the next time we are in the same city ... but save an hour or two ...

Yes, there usually is some flexibility with age ... but there are also near hard deck, and hard deck numbers that a company will not pass ... especially on a premium brand ... because they know the customers will revolt. For instance, the Maker's Mark near hard deck minimum age is 5 years 9 months ... below that, the flexibility completely evaporates ... which is why Maker's was out of stock in some states for almost a month last summer.

There are quite a number of assumptions that go in to a production model. Some can effect things drastically, and some have a lesser effect.

Also, I believe that sometimes the production decision makers completely ignor the sales and marketing decision makers when devising their lay down strategies.

[cowdery]

Being primarily a marketing and sales guy myself I can say that ignoring the marketing and sales decision-makers is generally good policy.

Maker's, of course, has the hardest job because there aren't any cats and dogs brands to absorb the bad barrels.

And Maker's sells every drop it makes and is always on allocation. None of this is to say the Knob shortage isn't real. Just trying to put it in perspective.

[Bourbon Geek]

I am pretty certain that the Knob Creek shortage IS the real deal ... I think it is probably a one-off short to mid length duration issue. My guess is that the decision makers oops'd in the lay down strategy for a year or so about 8 years ago. The big problem for KC is that it is at the top of the age totem pole for Beam ... everything below it can steal from KC ... but the buck stops there.

I suspect they have been scrambling for more than a year to fill the gap ... maybe even re-designating some Beam Black for KC ... and buying or trading with another company to fill in the Beam Black inventory.

The production folks at Beam right now are a very competant lot ... I'm sure they will get this fixed, and we won't see this kind of shortage again.

The one thing that does bother me is the way they have been handling it ... kind of in-your-face approach ... Instead of an "I'm sorry" ... we get a Tee shirt saying we survived the shortage even before we start feeling it's effects.

[Blitz]

... we get a Tee shirt saying we survived the shortage even before we start feeling it's effects.

I agree. I got my t-shirt yesterday, but I have a couple bottles in the house and my local Binny's is well stocked. I don't feel much like a 'survivor'.

[pepcycle]

Few Notes:

1. My letter with my shirt says to save it until the shortage is over before wearing, hence Survived will be appropriate. In general, I find this group is not one to follow directions, so I'm sure many have worn theirs already.

2. Oil was down $2.50 a barrel yesterday. My KC futures plan is working.

3. The JB Small Batch is destined from Day 1 to be the final product. Mashbill and still settings are different for the White Dog for each of the products, so you can't make up the difference by finding whiskey that matches the profile. Marketing jumps in and targets the advertising to a 20-40 Year Old Male demographic and it outsells all the others. No wonder there's a "shortage". The marketing boys did their job of putting $ behind the least likely to succeed.

[cowdery]

Beam makes two bourbon mash bills. Jim Beam and Old Grand-Dad. The difference is in the percentage of rye--about 15% for Beam, about 30% for OGD. They use different yeast too.

Knob, Booker's and Baker's all use the Beam juice, Basil Hayden's uses the OGD juice. With the Beams its when they barrel that they decide what it's going to be, as the entry proofs are slightly different. It's so slightly different that they probably could divert one to the other if they wanted to to make adjustments. Knob Creek and Beam Black, at nine and eight years respectively, are the big sellers, much bigger than Booker's or Baker's, so even if they did decide to rob Booker or Baker to pay Jim or Knob, it wouldn't help much.

Just about everybody is very tight on whiskey aged eight years or more right now.

[ILLfarmboy]

I was down in Peoria today, stopped one of my favorite liquor stores, Frier Tuck's, they had plenty of KC for 31 dollars and change. I wasn't tempted in the least. But I did pick up a couple bottles of Old Fitzgerald BIB.

[jburlowski]

So where does the Beam Distillers Series 7 y.o. fit into this equation?

Based on all the recent discussion of OT, I recently bought a bottle. The best I can say about it is that it tastes like something between JBW and the 7 yo Distillers Series (albeit at a lower proof). Don't know what the mash bills are but, could it be, that OT was jettisoned to free up more aged juice for the Distillers Sseries or, ultimately, KC?

[Stu]

I wonder if 4R's is seeing the Coor's effect happen to them in the states that they have expanded to in the last couple of years?

When Coor's was available only on the west side of the country everyone thought it was the greatest beer ever.

But when they went national and eveyone tasted it and it was always on hand at the local store it lost it's mistique and was just another watered down beer.

Oscar,

When they went national, they used an additional water source to make the volume needed to sell nationally. Therefore the quality changed. I used to love Coors, but now it tastes like Bud (which in my opinion is a poor substitute for beer).

[HipFlask]

Pick up some Spam, while you're at it ... I hear they go great together when you are dining by candle light.

Boourbon Geek, that was priceless. I'm still laughin. Thank you for that.

[polyamnesia]

Well I'm a commie and I hate free market capitalism, but I believe them. They're in it to make money. That's how it goes; as a prophet once said, it's all about the benjamins, baby. Why not make the best of a challenging situation and have some fun with it?

hear, hear:grin:

i just got my t-shirt in a truly wasteful, oversized tube...

just checked the PLCB store and seems my Delaware Country stores are still pretty well stocked...

(and shockingly those two Closeout bottles of WT Rare Breed are STILL sitting there at $21 each here in Media...:bigeyes: )

[camduncan]

Well I'll be! I just got my shirt sent to me in Australia.....where they don't even sell Knob Creek anymore :skep: (though in fairness, I do still order bottles from Binnys on occasion)..

A smart piece of marketing. I might just go out and buy some Bookers to celebrate

[camduncan]

If anyone is looking for a smaller size shirt.... I have a Large size that is too small for me and would be happy to arrange a swap for an XL or XXL. PM me if you're interested.

[funknik]

Got my shirt today, which was serendipitous since I opened a bottle of KC that my in-laws gave me for Christmas this afternoon. Marketing gimmick or whatever, it's cool to get a free shirt and this is fine, if overpriced, whiskey -- I think that despite being a different mashbill, this is very similar to OGD 114.

[independant]

I think Knob Creek knows that I don't really care for them because I still have not gotten my t-shirt.