Brace yourselves, bourbon fans, your booze of choice is about to be sweeter and more expensive.
Beam (BEAM), the company behind Jim Beam, Maker’s Mark, and a barnful of boutique bourbon labels, is a little drunk on its success with flavored batches. Its Jim Beam Honey has been a huge hit, as has Red Stag, a line of booze available in a range of cough-syrupy flavors, from “black cherry” to “spiced.” Both brands of hootch are now available in 30 countries around the world.
Beam’s Maker’s Mark sales are up 17 percent this year, despite the PR disaster the company found itself in when it toyed with weakening the recipe. On the small-batch front, Beam’s Basil Hayden sales are up by about one-third, and drinkers snapped up 15 percent more Knob Creek bottles in the recent quarter.
The sweetened varieties are truly succeeding at luring women, according to Beam Chief Executive Matthew Shattock. “We think females are now participating in flavored bourbon at twice the rate they are in the unflavored bourbon,” he said in a conference call today. (“Participating,” we assume, means “drinking.”) Beam may even be cannibalizing itself on that front. Sales of its Skinnygirl pre-mixed cocktails are down by almost one-third this year; meanwhile, one in 10 of Beam bourbon bottles sold now feature some sort of flavor.
Not surprisingly, the company is pouring two new blends into the market this fall: Jim Beam Maple, which we assume is intended for stiff pancake breakfasts, and Knob Creek Smoked Maple, presumably for bacon around a campfire.
Bourbon traditionalists who have read this far are probably gagging already, so we’ll just keep going with some bad news. All the bourbon buzz has persuaded Beam to raise prices on its traditional fare. Over the next few weeks, the company will lever “low single-digit” percent price increases across all its bourbon brands. Here’s how Shattock put it in a conference call today: “In context of some challenges in other areas where I think there is some price competition … that will give us a good platform as we go into next year.”
Translation: Unlike vodka, we pretty much have a lock on the bourbon market, so we can do this.
And don’t forget, it generally takes at least a few years to make the stuff—so the market is, ironically, illiquid. Kind of makes one want a drink.