Why do Buffalo Trace and Julian continue to market Pappy and BTAC?

[fussychicken]

Why do more people need to know about it? Why is it still showing up in magazines and newspapers all over the land? Why are these whiskeys getting less retail distribution so they can send more to bars and restaurants so that more people can "experience" this whiskey thus building awareness? I know that they alone don't fuel the hype machine, but nevertheless why add any fuel at all?

Who wins:

• Flippers
  
• Retailers that like to gouge
  

Who loses:

• Enthusiasts
  
• Retailers that don't gouge (because they get 500 phone calls and send home angry customers empty handed)
  

What is in this for BT/Julian? They haven't raised the price much, so they aren't really making much off this. Kudos to them for that. However, it doesn't really matter because so few people can actually get it at this price anymore. So what is the motivation? Is there a long term plan to drastically raise the price to finally balance out the supply and demand? Something else? Help me out guys and gals....

[TunnelTiger]

I would assumed they are building the brand for the future so that when they have a larger supply they can maintain the price points.

Just like our friends from Scotland have done.

[nd2005]

The motivation is that they've created likely the single most sought after product in the liquor industry at the moment. They are certainly making money off of it - perhaps they could make a little more, but I think their primary motivation right now is to continue elevating the prestige of the brand and, by association, Buffalo Trace's other offerings.

As mentioned above, they want to position themselves to be a Macallan/Balvenie/Glenfidditch/etc - an institution rather than a few year long fad.

[Lazer]

To let people know that they are still making it. You wouldn't know from just walking into a liquor store. They have to keep the dream alive.

[Rutherford]

The motivation is that they've created likely the single most sought after product in the liquor industry at the moment. They are certainly making money off of it - perhaps they could make a little more, but I think their primary motivation right now is to continue elevating the prestige of the brand and, by association, Buffalo Trace's other offerings.

As mentioned above, they want to position themselves to be a Macallan/Balvenie/Glenfidditch/etc - an institution rather than a few year long fad.

I think this is mostly it. If people widely consider BTAC/Pappy the best American whiskey in the world, it can help sell more Buffalo Trace, Eagle Rare, Sazerac Rye, Blanton's, EH Taylor, and the like. As a consumer, I'd much prefer if they just priced their products honestly: We'd get a functional market for these goods, and they would get more money for their premium products. As it stands though, BT probably sells 100 bottles $35-$70 bourbon (up to EH Taylor) for every bottle of BTAC, so BTAC is almost more advertising for the business as the whole than it is a product to make money.

[wadewood]

Is Van Winkle paying for advertising or are they just being written about for free? I think it's the later. Van Winkle used to exhibit and pour at KY Bourbon sample & Festival (and pay the fee to do so) but they have not done so in years.

[soonami]

As others have touched on, it is about brand building. Some car companies have sold halo cars at a loss or lost millions of dollars in Formula 1 or other racing series just so that people will associate the name with the image and prestige of the top of the line car. This is also why car companies spend millions to build concept cars for auto shows that will never be commercially made and sold, it's to promote the brand ideals and inspiration.

[P&MLiquorsEric]

I think this is mostly it. If people widely consider BTAC/Pappy the best American whiskey in the world, it can help sell more Buffalo Trace, Eagle Rare, Sazerac Rye, Blanton's, EH Taylor, and the like. As a consumer, I'd much prefer if they just priced their products honestly: We'd get a functional market for these goods, and they would get more money for their premium products. As it stands though, BT probably sells 100 bottles $35-$70 bourbon (up to EH Taylor) for every bottle of BTAC, so BTAC is almost more advertising for the business as the whole than it is a product to make money.

I bet the ratio is closer to 1000:1 or even 10k:1 of regular release bottles sold to btac/pappy.

I think the btac was born to do something with aging stock before the boom. Now it is bitten with the burden of fame. They don't have the aged stock to increase supply for a number of years. Thus it is used like a super model, splashed over the proverbial billboards behind high end bars, featured in style and fashion mags as simply "the best bourbon in existence."

[sku]

Several years ago, I remember hearing retailers complain that their allocation of Pappy and BTAC was based on how much other Sazerac Company product they sold (not just bourbon but vodka and other products). I don't know if this is still the case (or if it ever was), but if allocations are based on such sales then the more demand there is for Pappy/BTAC, the more retailers will want them and the more incentive they will have to push other product.

[ChainWhip]

With respect to marketing, it's always a coup to have your customers pay you to pimp your brand name on their body.

In any event, it looks like the allocation just got skimpier:

http://www.state-journal.com/local%20news/2013/10/16/more-than-26k-in-rare-bourbon-stolen-from-buffalo-trace-distillery

[MyOldKyDram]

LOL an inside job huh? Wow. Sounds like lots will be going without this holiday season.

[Josh]

With respect to marketing, it's always a coup to have your customers pay you to pimp your brand name on their body.

In any event, it looks like the allocation just got skimpier:

http://www.state-journal.com/local%20news/2013/10/16/more-than-26k-in-rare-bourbon-stolen-from-buffalo-trace-distillery

Holy cow. Anybody have a subscription and able give us a summary of the article?

[brettckeen]

Several years ago, I remember hearing retailers complain that their allocation of Pappy and BTAC was based on how much other Sazerac Company product they sold (not just bourbon but vodka and other products). I don't know if this is still the case (or if it ever was), but if allocations are based on such sales then the more demand there is for Pappy/BTAC, the more retailers will want them and the more incentive they will have to push other product.

And why not? That seems to make sense to fullfill the goals of the entire corporation. If their rain vodka sells better than some other well vodka it helps saz and doesn't change much for the well vodka consumer.

[sob0728]

What is in this for BT/Julian? They haven't raised the price much, so they aren't really making much off this.

I don't agree with that statement. The price has gone up quite a bit. Even at non-gouging retailers. Did anyone get Pappy 15 for $50 last year? That's what it was in 2011. BTAC had at least a 20% increase in price last year as well.

[Yeti]

I bought Stagg and Weller from the same store in 2012 and 2013. In 2012 it was $67.49, in 2013 it was $94.99. That obviously isn't indicative of what wholesale might be, but it is what it is.

[Wryguy]

My first BTAC was 59.99 for ER17 and Stagg in 2011. Last year, same store, 119.99. I didn't realize the change until she rang me up, and I wanted the bottles, so I let her run the card. But as I walked out I vowed never to buy from them again, and I haven't. Wonder how much they'll try to jack it up this year? I won't be around to find out.

[theglobalguy]

I bought Stagg and Weller from the same store in 2012 and 2013. In 2012 it was $67.49, in 2013 it was $94.99. That obviously isn't indicative of what wholesale might be, but it is what it is.

To leap off Yeti's data, when it sells out before it hits the shelves, i can't begrudge them for making a bit more off it. The labor costs for answering the phones and saying "no we're out" alone will eat that up. Is a store gets 10 bottles and makes an extra $20/bottle....nothing in the grand scheme of things.

Edited October 16, 2013 by theglobalguy
spell check failed me!

[smokinjoe]

I bought my first Staggs in 2004 @ $35. I think MSRP is $70, this year? Arguably, the greatest whiskey on the planet simply doubling to a very reasonable $70 in 9 years? We should Kiss BT's big, hairy, bison butt...

[smknjoe]

I bought my first Staggs in 2004 @ $35. I think MSRP is $70, this year? Arguably, the greatest whiskey on the planet simply doubling to a very reasonable $70 in 9 years? We should Kiss BT's big, hairy, bison butt...

I would if I could, Joe...

[CL]

I bought my first Staggs in 2004 @ $35. I think MSRP is $70, this year? Arguably, the greatest whiskey on the planet simply doubling to a very reasonable $70 in 9 years? We should Kiss BT's big, hairy, bison butt...

$35? Good deal. I remember it being $50 in 2002 when it first came out. BTW, the 15 yr old VW then was ORVW and it was $35.

[fussychicken]

To those that say it is all about brand image, I have one friendly bit of counterpoint. Scarcity is good for brand image as long as you eventually get to scratch the itch. What good is brand image if no one can ever buy it? Seems to me like it would have the reverse effect. It is hard to get a gold iPhone 5s right now, but in 2 months I'll be able to walk into any store and get one. When will I be able to walk into any store and get some Pappy?

Several years ago, I remember hearing retailers complain that their allocation of Pappy and BTAC was based on how much other Sazerac Company product they sold (not just bourbon but vodka and other products). I don't know if this is still the case (or if it ever was), but if allocations are based on such sales then the more demand there is for Pappy/BTAC, the more retailers will want them and the more incentive they will have to push other product.

This makes a little more sense, and yes I know at least the distributors were pushing this. Who knows if big daddy BT was condoning this behind the scenes or not. (Probably so)

In either case, this doesn't really work when you don't really reward these people. As it stands now, it seems like each retailer is getting less and less no matter how much regular BT product they sell.

[BourbonGuy]

What I have been hoping for it that BT and Julian realized about 10 to 15 years ago how popular their product was, matched the recipe as much as possible and made started to up production. The stuff we get now has BT juice in it. So hopefully we will see a increase in supply.

[rndenks]

I have been thinking along the same lines of Fussychicken and BourbonGuy's posts regarding Pappy and BTAC. I wonder how much of the "limited" availability is due to lack of production versus strictly marketing? On one hand if they were making limited quantities before they became the vogue brands, it makes sense that they could have increased production to keep up with demand. However, that increased demand just may not be aged for distribution yet, but eventually we could see more availability.

On the other hand, if they make it too available now it might lose some of that mystique, the demand dips a bit and prices may dip too. Therefore they are making the same money either way, but they get the free publicity with the lower demand. My guess is this is a delicate line, and they have calculated the proper way to walk that line.

I also agree that if you never get to "scratch that itch" it could get annoying. I would guess that is why you see little hills in release quantities...or maybe I am overthinking the whole thing.

[Yeti]

I'm going to say something that is probably going to piss some people off.

It's not that hard to get BTAC bottles. It may be hard to get all of them each year, or to get them for $80 or less, or to get a whole case of any one release... But it's not that hard to get a bottle of Antique. If you really, REALLY wanna scratch that itch, many people can. Especially people in this community. Make a personal connection with your local retailer, the one with the high end stuff that charges $2 extra for each 6-pack of beer. Buy your beer there. All the time. And chat them up, let them see your face, and remember your name from the credit card you're swiping all the time. Offer to open a bottle you just purchased, or bring something in to share when you know business will be slow. It's basically a reverse sales pitch, you're selling yourself to them as a good and appreciative customer. If that's too much work for you then sign up for the lotteries and the lines, and play the "luck" game like the vast majority of people do. Some of those people get what they want as well.

[sutton]

I'm going to say something that is probably going to piss some people off.

It's not that hard to get BTAC bottles. It may be hard to get all of them each year, or to get them for $80 or less, or to get a whole case of any one release... But it's not that hard to get a bottle of Antique. If you really, REALLY wanna scratch that itch, many people can. Especially people in this community. Make a personal connection with your local retailer, the one with the high end stuff that charges $2 extra for each 6-pack of beer. Buy your beer there. All the time. And chat them up, let them see your face, and remember your name from the credit card you're swiping all the time. Offer to open a bottle you just purchased, or bring something in to share when you know business will be slow. It's basically a reverse sales pitch, you're selling yourself to them as a good and appreciative customer. If that's too much work for you then sign up for the lotteries and the lines, and play the "luck" game like the vast majority of people do. Some of those people get what they want as well.