McKenna Bourbon launched in Australia

[camduncan]

From the article here:

http://www.smh.com.au/news/business/lion-looks-to-kentucky-in-battle-with-fosters/2006/07/28/1153816379726.html

There's also a web site:

http://www.mckennabourbon.com/

LION Nathan has chosen a Kentucky bourbon brand to spearhead its latest attempt to tap the fickle tastes of young consumers, just as growth in the ready-to-drinks market is slowing.

The trans-Tasman brewer has bought the rights from Japanese brewer Kirin for McKenna bourbon, which will compete head-to-head with rival Foster's Cougar.

Lion's entry into the dark spirits ready-to-drink market is not expected to be an overnight success as it faces a tough fight to establish the brand in a segment in which the days of double-digit growth appear at an end.

The brewer will launch McKenna bourbon next month as both a full-strength spirit and ready-to-drink beverage in Queensland - the home of Diageo's Bundaberg Rum which is second to Jim Beam Cola in the burgeoning RTD market.

Lion said men aged between 18 and 34 drink about 45 per cent of the bourbon produced, and they were "drinkers we know well through our beer brands and we believe that the new proposition is highly complementary".

The launch comes as Macquarie Equities says volume growth in RTDs slowed to 7.6 per cent in the June quarter from 12 per cent in the same period last year.

A Macquarie analyst, Callum Bramah, said Lion faced a hard slog to establish the McKenna brand in a market dominated by Jim Beam and Independent Distillers' Woodstock Bourbon.

"The RTD segment is obviously growing faster than any other part of the liquor market but I believe the growth rate is slowing somewhat," he said.

Dark spirit-based RTDs comprise about 78 per cent of Australia's RTD market, which has total sales of about $2.2 billion. Lion has just 2 per cent of the RTD market here, and about 20 per cent in New Zealand where it competes against Independent Distillers, the manufacturer of Purple Goanna, KGB and Vodka Cruiser.

Lion is still waiting on NZ's Commerce Commission to decide if the brewer has regulatory clearance to launch a bid for Independent.

Lion on Friday reiterated its forecast for earnings to rise 11 per cent to $255.5 million for the year to September 30 thanks to an increase in beer volumes.

Australian beer volumes rose 1.8 per cent to 528 million litres due to strong growth in international premium and national brands, which offset a fall in regional and value brands.

Shares in Lion fell 7c to $7.91 on Friday.

[bourbonv]

I have been helping Al Young at Four Roses for about a year now gather the history of Henry McKenna. It is good to hear that the deal not only went through for them, but is now a reality. I am sure it will be a great product with some good Kentucky Bourbon. Any idea as to which of the 10 mash bills Four Roses is going to use? Or is it going to be a combination of several?

Mike Veach

[BourbonJoe]

Mike,

I thought Henry McKenna was a product of Heaven Hill?

Joe

[bourbonv]

Joe,

Seagrams bought Henry McKenna in the 1940's. They sold Henry McKenna for years in the U.S. and overseas. They sold the U.S. rights to the brand to Heaven Hill in the late 70's or early 80's but kept the overseas rights to the brand. As you can see from the press release, it is Kirin who is involved in this deal and it will be Four Roses Bourbon in the bottle.

Mike Veach

[Gillman]

Thank you Mike. This explains why Henry McKenna, which was sold in Canada in a distinctive shaped clear bottle in the 1980's, did not taste like Heaven Hill whiskey. It is hard at this distance to remember it well but I am fairly sure it did not have the Heaven Hill "smack" (the green eucalyptus taste). To be honest, I can't say it reminded me much of current Four Roses' production either but FR may have tasted different then. Also, in the 80's, didn't Seagram have more than 1 plant in the U.S. making bourbon?

Gary

[cowdery]

Under Seagram's, McKenna was made initially at the McKenna plant itself, in Fairfield (a few miles from Bardstown), until sometime in the 70s when that plant closed, then it moved to the Louisville Seagram's plant until that one closed. I think that was when they split it. The international production went to Four Roses and the domestic went to Heaven Hill.

My assumption is that Kirin owns the brand and Heaven Hill merely has a contract for U.S. distribution, though as part of that it also produces the whiskey sold as McKenna in the USA.

I'm confident there is no effort to match a common profile between the two producers.

The Four Roses brand is owned by Kirin, as is the Four Roses Distillery in Lawrenceburg, but about half of its production is contracted to Diageo for its bourbon needs. I wasn't sure who actually owns McKenna now, but this makes it pretty clear that Kirin does.

[Gillman]

Thanks, Chuck, therefore the Mckenna I drank in Ontario in the early 80's may have been made at the original McKenna plant. I remember thinking this bourbon was good but not great. It had a certain "rough" character, grainy. At the time, I'd have compared it, say, to Glenmore Kentucky Tavern in the sense of two lesser known labels. I felt the Kentucky Tavern trumped the Mckenna, by a fair margin actually. However Seagram offered at the time another bourbon, which trumped Kentucky Tavern: Benchmark.

Gary

[bourbonv]

Chuck,

I asked Al about the Heaven Hill deal. I asked if that was a brand sale or simply a lease of the U.S. rights. He was told he was not sure but assumed it was a brand sale to Heaven Hill with Seagram retaining the non- U.S. sales rights.

Gary,

Ed Foote was Master Distiller at Henry McKenna when he retired from Seagram and went to work at Stitzel-Weller. He told me that the same whiskey mash bill and yeast made at Louisville, Fairfield, Lawrenceburg and Athertonville would always taste different in the quality control lab. Differences in water and stills changed the flavor and the QC people could tell which whiskey was made at each distillery without looking at the label. Ed always thought the Four Roses Distillery on Dixie Highway in Shively made the best whiskey, but it was closed in the 1960's because the 7th Street plant was bigger and actually built by Seagram and not Frankfort Distillery.

Mike Veach

[cowdery]

It's possible Heaven Hill owns all rights to the trademark within the USA and Kirin owns them for all other markets, but that seems unlikely from a legal standpoint. It is more likely that Kirin "owns" the brand and has assigned certain usage rights to Heaven Hill on a contractural basis. I don't know Al, but it's possible he isn't familiar with these types of distinctions.

[camduncan]

Now if I could just find a bottle or RTD can to try :searching:

[cowdery]

I heard they were doing an RTD. Mixed with cola?

[leigh_munro]

I heard they were doing an RTD. Mixed with cola?

Yep it'll be a bourbon and cola RTD to compete with all the others we have here.

Cameron, I've also been looking at all the bottle shops i've past in the last week and am yet to locate any.

[bourbonv]

Chuck,

I am suprised you don't know Al Young. I am not sure what his exact title is at the distillery, but plant manager would be a good description. He has been doing the job there since I met him in the early 90's when he was Ova Haney's right hand man. He is also a big fan of bourbon/distilling history. I think his answer was more of a "I know, but I am not at the liberty to say" type answer.

Al gathered the history for the firm working on the brand in Australia and New Zealand. I helped him find the information and pointed him to my timeline on McKenna. I also copied some trademark files and found a published image of old Henry McKenna himself. They have some good historical background but as Al told me, it is up to the marketing people to use it. We will have to wait and see what they do with the information.

Mike Veach

[Gillman]

Mike or Chuck, why have RTDs never taken off here?

Gary

[wadewood]

Mike or Chuck, why have RTDs never taken off here?

Gary

Well, I'm not either, but I'll hazard a guess. In the US anything with hard alcohol, even if it diluted to strength of beer or wine, is still sold through alcohol distribution channels. In most states, this means it can not be sold in grocery or convenience stores like beer. I also think there is a perception that hard alcohol is bad for you compared to beer.

Another reason is most of the RTDs on the market taste like crap. They may need to hire you to create a better tasting beverage

[Gillman]

Thanks, Wade.

But here's the thing: the ethanol content in those drinks surely doesn't exceed 5-6% ABV.

Many beers today of course equal or exceed that so even if the RTD is, say, as strong as Mike's Hard Lemonade or the current vodka coolers (around 8% I think), why wouldn't it fit in the beer section of any beer retailer?

Gary

[bourbonv]

Gary,

I suspect Wade has hit the nail on the head here. It is all about distribution. If it has distilled spirits in it, most states will not allow it to be sold in a grocery store or convenient store. Proof does not matter. I know that Brown-Forman tried to get this law changed in Kentucky, but failed to do so. This means the the low proof drinks in such stores have a malt based alcohol that is not distilled. They simply do not taste as good as drinks made with real bourbon.

Mike Veach

[wadewood]

The US liquor laws can border on stupid at times. I agree with you that if the ABV is lower than most beers, it should be able to be sold like beer. But that is not the case.

I remember when Bacardi launched their Silver drinks, they initial made them using rum but then switched to malt based product. Federal regulators allow flavored malt beverages to be taxed as beer if more than 50 percent of their alcohol comes from brewing, which makes them cheaper than hard liquor.

[Gillman]

Okay fair enough, I hadn't realised state laws on where alcohol can be sold regulate, not just the ABV levels, but the way the alcohol in the drink can be made.

Gary

[leigh_munro]

[cowdery]

Interesting bottles for McKenna. Nothing like anything that brand has had before.

Wade hit the nail on the head re RTDs. Most states restrict by type, i.e., spirits are spirits regarless of ABV, hence the malternatives, which support the brands but contain no distilled spirits.

Ohio is a state that does restrict by ABV, not type, but it's the exception.

Also, spirits are taxed more than wine and beer, ABV-wise, making RTDs more expensive than beer- or wine-based beverages.

[ThomasH]

I remember back in the 1980's seeing Jim Beam and cola sold in 6 packs of cans like beer. I remember buying some at a local drive thru. They had a strength similar to the beer of that the time. They didn't taste too bad but I'm not sure if they had actual bourbon in them or rather were some sort of malt concoction. While on the subject of malt beverages, Does anybody remember a brand called White Mountain coolers? These were brought out so that people who were 18 could buy them because they were malt based as opposed to having to be 21 to buy actual wine coolers. I particularly remember the orange flavor, it didn't have much kick or alcohol taste, but the aftertaste definitely fell under the category of lighter fluid!

Thomas

[leigh_munro]

I have finally found a store that had a couple of the 700ml bottles in stock. Will give it a try tomorrow night.

Leigh.

[camduncan]

Don't keep us in suspense Leigh - where is the store? How did it taste?

[leigh_munro]

Don't keep us in suspense Leigh - where is the store? How did it taste?

I got the last 2 bottles from the Glen hotel. They had plenty on the premix left though. Had a bit last night and i quite enjoyed it.

The Mckenna website now has a listing of the hotels that are currently stocking it if you want to find some place closer.

leigh.