Tinker, Tailor, Soldier, Sales? Beam Inc. profits from Maker’s Mark 'proofgate'


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Beam Inc. revealed yesterday that bourbon brand Maker’s Mark Q1 2013 sales rose 44% due to short-lived plans for an alcohol cut that prompted a sales spike, but is this PR blunder turned marketing masterstroke one brands could intentionally replicate?

Could tailoring a tinker with a much-loved original drink formulation – or at least one that it iconic yet taken for granted – publicizing the fact, then raising the red flag and graciously capitulating to consumer demand and restoring the original recipe, prove a novel weapon (solider) in the beverage marketer’s armory?

Not that I’m suggesting that Beam Inc. intentionally staged a PR ‘blunder’ to secure a Q1 sales spike – incidentally, overall group net sales rose 8% to $577.7m, operating income rose 37% to $179m – where a Maker’s Mark supply shortage clearly prompted the proof change from 45% to 42% ABV.

But in a heartfelt February 17 Facebook announcement that the planned cut would not take place (you can almost hear careening violins), Beam Inc. quickly turned PR blunder into PR blinder, with COO Rob Samuels telling Maker’s fans: “You spoke. We listened. And we’re sincerely sorry we let you down.”

“The unanticipated dramatic growth rate of Maker’s Mark is a good problem to have, and we appreciate some of you telling us you’d even put up with occasional shortages,” ​Samuels added.

“We promise we’ll deal with them as best we can, as we work to expand capacity at the distillery.”

Tinker, tailor, soldier, sales?

New Coke

‘New Coke’ is the​ textbook example of how an apparently disastrous decision to re-jig a well-known formula (in this case one that hadn’t changed in 99 years) can suddenly turn the worst to the best.

Launched in April 23 1985, stripped off the market on July 11 1985. It lasted 79 days but the return of ‘old Coke’ prompted a sales surge that, after Pepsi had begun to outsell Coke in supermarkets by 1983 – helped restored the brand to clear cola sales frontrunner.

This gave rise to a conspiracy theory that the debacle was a deliberate marketing ploy, but then Coke COO and President Donald Keough famously said: “Some cynics will say that we planned the whole thing. The truth is we are not that dumb, and we are not that smart.” ​Hmm…

And although SAB Miller brand Victoria Bitter (VB) paid the price for not listening to consumers soon enough – under the Foster’s Group watch two alcohol cuts from 2007 made it a 4.6% brew with a similarly shrinking share – it was restored to 4.9% last October, and straightaway posted its first growth in 10 years (+2%) in Q4 2012.

‘Proofgate’ helped consumer awareness

Victoria Bitter

Beam Inc. is a social media savvy brand, and although it didn’t engineer ‘Proofgate’, another lesson here is that P2P channels like Facebook can quickly alert the such big brands to potential PR problems.

Such channels boost brand visibility and strength, but can also increase vulnerability levels. But you can draw opportunities from this as a brand and get closer than ever to customers, just so long as you listen – an underrated quality among some business go-getters – then communicate in turn.

During Beam Inc. Q1 2013 call with investors and analysts yesterday, Kevin Dreyer from Gabelli Asset Management – refered to the Maker’s Mark controversy as ‘proofgate’, and said it “might actually have helped you out with consumer awareness”.

Clearly the incident lent Maker’s Mark an opportunity to communicate its brand values to fans that might not otherwise have arisen. Beam Inc. CEO Matthew Shattock said:“This episode reinforces that Maker’s is a rare brand that can inspire this kind of intense consumer passion.”

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