I’ve never had Maker’s Mark, but I do have friends who enjoy this particular brand of bourbon — or the bottles in which the bourbon is sold. With this latest piece of news, I’m wondering if the company believes the bottle is the product being sold rather than the alcohol inside.
Beam, the corporate owner of Maker’s Mark, has announced it’s reducing the alcohol content to meet demand. The alcohol content is reduced by simply adding water. Watering down liquor and selling it for the same price is a scam as old as liquor itself, yet when the CEO sends a letter to loyal customers announcing the change, you can’t say the company is misleading its wholesale buyers, distributors, retailers, or customers.
The company is retaining the same price, though each bottle will contain less of its product. Adding or removing water is a common strategy for increasing profit. In some cases, removing water from a product allows the company to justify selling small containers for the same price, like with so-called “high efficiency” laundry detergents. In others, adding water or air allows companies to use the same size packaging to sell less product at the same price, or even a higher price, as prices to increase over time.
Your typical half-gallon carton of orange juice most likely has more water in it than one from ten years ago. Some food companies introduce new products with more air for a lighter or frothier consistency, offering less manufactured product and an increased volume for the same price.
Michael Arrington bought two containers of Tang a few months apart. Both containers indicated they contain enough powder to make 22 quarts of Tang, but the old one contained 72 ounces of the product while the new container, purchased in January this year, contained only 60 ounces. The only way that 60 ounces of powder can make the same amount of drink as the higher amount is if the customer dilutes it with more water.
This particular researcher didn’t mention the prices of the containers, but it is visual example of this latest approach to food manufacturing. Food inflation usually manifests differently: selling smaller containers that look similar to the former packaging, without the manufacturer misleading customers, using marketing tricks like Tang’s above to convince customers the new packages contain the same amount of product.
Maker’s Mark missed an opportunity here. This particular drink is not a basic need, so the company’s desire to reach more customers with a diminishing supply of alcohol doesn’t seem to fit what little I know of the brand. The manufacturers could have decided to increase the price, the normal economic reaction to decreasing supply and stabilized demand. As an elite product, a price increase would keep that brand identification alive. This news, however, seems to have tarnished the brand, and inspired complaints and jokes from customers.
Matthew Yglesias points out that Maker’s Mark is at lower end in the spectrum of bourbon products offered by Beam. Raising the price — or raising the price more — would, theoretically, intrude into the territory of higher-quality bourbon, and the company would compete with itself for the same customers. Some reports say Beam already raised the price of Maker’s Mark this year, but I can’t find any hard evidence.
Beam claims that customers can’t taste the difference between the heretofore standard Maker’s Mark whiskey and the adjusted mixture containing 3 percent less alcohol. If customers can’t tell the difference, does it even matter? And if customers can’t tell the difference caused by a significantly different recipe, should they even be commenting on the product?
Update: Due to the strength of customer backlash regarding the change to Maker’s Mark, the CEO of Beam has decided to reverse the company’s plans to water down the drink.
Updated February 18, 2013 and originally published February 11, 2013.