Is Dickel In A Pickel?

[Guest **DONOTDELETE**]

Frank - How's old George Dickel doin'Hank? I haven't seen him around lately.

Hank - Not too good Frank. He hasn't come out of the hollow for over two years now.

Frank - What's wrong wth him?

Hank - I heard he's come down with Diageo disease. It's fatal you know.

Frank - Hmm No foolin'!

In the July 28th, 1999 issue of 'The Tennessean' Rowena Millado reported that in late June the "George Dickel Distillery has pulled the welcome mat from tourists, closing it's country store and visitor center with no plans of reopening." Millado went on to report that the distillery used to attract about 10,000 people a year. Now that figure had droped to roughly 5,000 visitors. "Dickel plant manager Jennings Backus said the tourist center was a marketing tool that wasn't profitable to keep." The closing of the visitors center was not officially announced and came as a shock to visiting Dickel faithful expecting to find the distillery open. The Dickel website that was launched in that same year makes no mention of the closing. Indeed the whole purpose behind the site seems to be that of a facade that all is hunky-dory down in Dickel-land.

Coming hand-in-hand with the closing of the vistors center was the suspension of distilling operations. This situation is said to be temporary. Jennings David 'Dave' Backus is the Master Distiller and is now also the President of George Dickel. "I've worked for Dickel all my life, and I became the Master Distiller in 1978." he said in a telephone interview on December 12th, 2001.Although he has not "distilled for several years" he explains that the shutdown is just a simple "inventory adjustment after several years of overproduction." "It's hard to anticipate demand ten years into the future" says Backus, but he plans to "distil as needed to meet demand." The distillery has eleven single story metal-clad warehouses with a maximum capacity of some 150,000 barrels. "We're very near maximum capacity" states Backus.

On the surface things don't look so good for Dickel. The stelth closing of it's visitors center coupled with the fact that they haven't distilled a drop in "several years" and are still "very near maximum capacity" is disconcerting. While looks can be deceiving there are other disturbing factors that bear scrutiny.

While gathering research for this report I visited the Dickel website and the site's bulletin board. What I found there was both sad but none-the-less noteworthy. One poor fellow had tired three times to join Dickel's 'Water Conservation Society', but had never received any membership materials. Here he was begging someone to please let him join. There was no reply. I tried it myself and got the same thing - nothing. One woman wrote that she and her family had gone to visit last Fourth of July and found the distillery closed. She asked when it would be open for visitors so she could schedule her next vacation. She got no reply. There were four men and one woman from Austrailia stating that Dickel was no longer available to them. They were all just basically begging for Dickel. Same thing with three men from England. Then a woman from Deleware showed up and posted that now she couldn't get Dickel. I had the audacity to actually post some answers to some of these people. The board was shutdown within a few days.

There is every indication that Dickel's sales are declining, but sales figures are hard to come by. George Dickel was always a small southern brand and has been particulary strong in Tennesse; North Carolina, Virginia, Alabama, and Mississippi. A very reliable source has kindly supplied the following sales volume (called depletions) measured by actual cases. The numbers have been rounded off.

> > > >1996 > > > > > >2001 > > > > Change

NC > 50,000 cases > > 34,000 cases > -16,000 cases

VA > 20,000 cases > > 10,000 cases > -10,000 cases

AL > 15,000 cases > > > 6,500 cases > - 8,500 cases

MS >>7,000 cases > > > 3,800 cases > - 3,200 cases

That's a five year decline in sales of some 37,700 cases or roughly down 40% in four states that just happen to be some of Dickel's strongest markets.

For the past year or so Dickel #8 has been bottled somewhere in Canada. Part of the purpose of this report was to try to ascertain the where and why of this move, but this aspect proved fruitless. Another source has provided these very acurate figures for sales of #8. 2000: 110,829 cases. 2001: 113,524 cases Change: 2,695 cases or up 2.4% This is encouraging. Whether Dickel has snapped their alarming five year sales slump or not remains to be seen.

Dickel was acuqired by Guinness in 1987. Guinness and United Distillers merged to becom United Distillers and Vintners. U.D.V. in now a wholly owned subsidiary of international drinks giant Diageo plc (public limited Corporation). The legacy of U.D.V. in the American whiskey industry is one of great sorrow. Stitzel-Weller (Old Fitzgerald; W.L.Weller, and Rebel Yell) Bernheim (I.W. Harper and Old Charter) and Glenmore (Glenmore; Ezra Brooks, and Yellowstone) were all distilleries acquired by U.D.V. The most notable fact here is that they were all shutdown never to reopen again under Diageo ownership. In 1999 Diageo sold the Bernhiem distillery along with the Old Fitzgerald label to Heaven Hill. The Old Charter and W.L. Weller labels were sold to Buffalo Trace. Diageo retained ownership of both I.W. Harper and George Dickel neither of which appear among the brands listings on Diageo's own website. Many e-mails were sent to Gary Galanis (marketing) and also Yvonne Harrison (corporate information officer) at Diageo. There has been no reply from either party. This 'batten down the hatches' mentality of Diageo's plus the closing of the Dickel bulletin board tends to reinforce their history in the American whiskey business. Whether or not Diageo is the diabolical destroyer of American distilleries is up to the reader to decide. If Diageo's history is any indication of Dickel's future it is one of impending doom.

Linn Spencer

Have Shotglass. Will Travel.<P ID="edit"><FONT SIZE=-1>Edited by Linn on Sat Jan 12 04:57:11 2002 (server time).</FONT></P>

[texascarl]

I'd read between the lines and have already started to buy up extra bottles of No. 12 and put 'em in a safe place. Don't want to wind up like my cousin who still laments that he can't get I.W. Harper anymore.

[Guest **DONOTDELETE**]

That is an astute observation Carl. The last bottle of Dickel #12 that I bought was superb. #8 is not eight years old nor is #12 twelve years old. There is no age statement on either of the bottles. In better times you could just devide by two. #8 was about four years old and #12 was around six. My best guess is that #12 is now eight to ten years old, and it shows.But don't fret none. Since the rackhouses are very nearly full there is a good ten year supply available.

Tell your cousin to look for, and buy Old Charter. Exact same recipe as I.W. Harper only more afordable and slightly better tasting. The twelve year old 'Classic 90' is the ticket. Otherwise the delicious 13 year old 'Propriter's Reserve' will cure what ails ya. Good stuff. Sure 'nuff!

Linn Spencer

Have Shotglass. Will Travel.

[Dave]

I was privileged to live In Tullahoma, TN for one year on my internship. It saddened me to see the Dickel distillery closed. I frequented Lynchburg but wished my experience of Tennessee Whiskys could be complete with a Dickel tour.

Oh, well, there is a good supply of Dickel 12 where I am now and I always have my Dickel keychain I recieved at a golf scramble to keep me company.

The locals tell me that Dickel packed "up north" and the name Tullahoma, Tennessee only means that's where the whisky is stored these days. The visitors center and distillery campus is barren. The time or two I drove to Normany there were a couple cars around but no sign of people. Sad, indeed

My tastes are simple. I prefer Dickel Old #12 to Jack's black label. I also enjoy straight boubon such as Knob Creek and Old Forester. Maker's Mark is a most exceptional wheated whisky.

Thanks for the post, Linn. Guess I'd better stock up.

Dave Juhl

[ratcheer]

Yes, this is so sad. For about the past ten years, greatly exceeding my recent interest in Kentucky bourbon, George Dickel No. 12 has been my everyday pour.

A year or more ago, I did manage successfully to become a member of the Water Conservation Society. They sent a package of marketing material and a couple of emails a month. You are really not missing anything.

I, too, will probably begin to lay in a lifetime supply of No. 12. The 1.75 liter bottles go on sale fairly often and it is a very good whiskey, even at the normal price.

Tim

[Guest **DONOTDELETE**]

Hello Dave and Welcome to Bourbonia! I see that this is your first post and your reply shows some emotional gravitation towards the issue. My best guess is that there is a ten year supply of Dickel whiskey in the wood and aging in the rackhouses. Whenever that supply drops to a critical level Diageo will either distil more or simply sell the distillery and brand as they have been known to do in the past. We shall all just have to wait and see.

Linn Spencer

Have Shotglass. Will Travel.

[Guest **DONOTDELETE**]

Tim I'm glad you brought up the issue of Dickel's 'Water Conservation Society'. No matter how lame the reality of their cutesy-pooh club may be the fact is that it is rather rude to say "Hey join our club", and then do nothing. Their so called 'post office' where you may send in questions is also a rather rude rouse. If you send in a question you will not receive an answer. The entire website in an exercise in subterfuge, and is nothing more than a slap in the face of the men and women that keep Dickel in business by buying their whiskey. It is not Dickel's doing. The website is Diageo's idea.

Linn Spencer

Have Shotglass. Will Travel.

[ratcheer]

Linn, I totally agree. Also, I should have mentioned that, although I used to receive stuff regularly from the WCS, I have not received anything from them in months.

Tim

[johnrobe]

I actually did receive a response to a recent email I sent to Dickel, although it did take them 14 business days to reply. Part of their response makes me wonder about who is answering the mail, someone from Dickel or someone from Diageo...the way they addressed the unfiltered barrel question makes me think the person answering the mail is not sitting in Normandy, Tennessee.

JR

----- Original Message -----

From: <johnrobe@hotmail.com>

To: <post@georgedickel.com>

Sent: Sunday, December 16, 2001 8:15 PM

Subject: Dickel Post Office

> subject : Dickel Post Office

> PreName : Mr

> FirstName : John

> LastName : Roberts

> r_month : 09

> r_day : 05

> r_year : 1972

> Country : USA

> comments : Hello, I read that there was once an unfiltered, barrel-proof

(112 to 115) George Dickel that was only sold at the distillery. I realize

that the visitor center is closed, but I was wondering if this bottling is

available anywhere. Did you ultimately distribute any of it once the

visitor center closed? My second question is, are you still bottling the 10

y.o. Barrel Reserve or is what's on the shelves all that is left? Regards,

John

From:"George Dickel Distillery" <postoffice@dickel.com>

To : <johnrobe@hotmail.com>

Subject: Re: Dickel Post Office

Date : Mon, 7 Jan 2002 15:47:14 -0600

Mr. Roberts,

I don't I have the answer to your question about the unfiltered barrel, I

would assume that what you are talking about is still at the Distillery.

Unfortunately, we are no longer bottling the Dickel Reserve. It is a fine

whisky and hopefully we'll have it again soon. Thank you for your comments

and support.

[Guest **DONOTDELETE**]

That is more than what I got JR! The company that designed the Dickel website is Kircos out of Nashville. They more than likely also continue to administer the site to include 'checking the mail'.

I'd also like to thank you for all your efforts in bird-dogging this story for me down in Tennesse. The reseach you provided was very valuable.

I would also be remiss if I didn't thank those of you behind the sceens that provided inside intel and must remain anonymous. You know who you are. Many Thanks to you all.

Linn Spencer

Have Shotglass. Will Travel.

[johnrobe]

Linn,

No problem. Anything to help promote/save George Dickel whisky is a worthwhile effort.

JR

[cowdery]

My theory on Dickel is that Diageo is only interested in supporting the non-U.S. sales of its remaining American Whiskey brands, which are George Dickel Tennessee Whiskey and I.W. Harper Bourbon. I.W. Harper has not been a significant domestic brand for a generation. Dickel was, but apparently not significant enough for Diageo to pay any attention to it. I suspect Dickel is continuing to get normal marketing support overseas, at least to the same extent as I.W. Harper. The rationale is that if supporting the brand does not increase its profitability significantly, it is more productive to simply "harvest" it, i.e., spend nothing and let the product seek its own level. Remember, distilled spirits products are not as profitable to the producer as they might seem, since so much of the retail price is tax and the expense of the three-tier distribution system.

<A target="_blank" HREF=http://cowdery.home.netcom.com>--Chuck Cowdery</A>

[Guest **DONOTDELETE**]

Chuck what is "the three-tier distribution system"?

Linn Spencer

Have Shotglass. Will Travel.

[johnrobe]

Linn,

I believe Chuck is referring to the Producer (distiller), Wholesaler/Distributor, and Retailer model.

The three-tier system was instituted at the end of Prohibition. In general, it is illegal for a business entity to hold all three classes of license (the sole exception is California, where people who agree to sell wine only can sell on all three tiers).

The theory behind it was that stopping any company from being vertically integrated would help keep out organized crime and help prevent monopolies.

Once, the three-tier system worked pretty well. Distributors served as marketing partners to the distilleries, breweries, wineries, but over the years the distribution tier has cosolidated and that marketing benefit has greatly diminished. In 1963 the BATF listed over 10,900 wholesale permits, by 1997 the number shrunk to less than 3,000....a 70% attrition rate. Over the same time period consider the California wine industry boom and the Microbrewery revolution and you see that the producer and distributor tiers are, in a way, going in opposite directions.

Wholesalers who once sold and facilitated sales are now merely choke points, order takers who have lost the skills to sell their products....not to mention that the big brands offer higher profit margins, are better known to and purchased by the average consumer. There's little incentive for a wholesaler to promote the underdog.

JR

[cowdery]

An excellent description of the 3-tier system, John.

<A target="_blank" HREF=http://cowdery.home.netcom.com>--Chuck Cowdery</A>

[johnrobe]

Thanks. Sorry to just jump in....I have strong feelings about the three tier system and the Webb-Kenyon Act (which, for those who don't know, gives each state the legal right to regulate alcohol any way it chooses, even to restrict interstate commerce, which would otherwise be unconstitutional), mainly because they keep me from enjoying my favorite beer, a microbrew from Oregon, without hopping on an airplane.

JR

[ratcheer]

And, I just saw that George No. 12, 1.75L is on sale for $31, this month. That is equivalent to $13.29 per 750ml. I hope I buy a bottle.

Tim

[Guest **DONOTDELETE**]

For those of you that haven't been to dickel.com please go there now. It's different today than it was nearly a year ago. To Chuck Cowdrey that stated that Deagio would only support its international markets - the plot has a new twist. If you look - you will see a new website. One that is far more honest, but not as forthcomming as we might like. The look is new!!!! That's a good thing. If you've read the FAQ's you will see that exports have been stopped, and they admit that their corporate parent is indeed 'Diageo'. This my friends is progress. They do not admit that the distillery is 'dark'. This is a rather reasonable dodging of the truth. George Dickle has never been older and as such has never been better. We have at our finger tips what may be the very best Tennessee whiskey at bargin basement prices. Praise be! Folks here will see the true power of the cyber-pen. Before this thread appeared - nothing - the same old crapola! Now we have very nearly a whole new website with some honest information. Proof positive that important bourbon industry insiders read and act on the information published on this forum. It is a beautiful thing. Amen.

[bobbyc]

Glory Halleluah Brother Linn, Those Heathen ........... might get religion yet!