Interview: Bill Samuels Jnr - Making a Mark
Bill Samuels Jnr, president of Maker's Mark, personifies the traditional Kentuckian. Not so much the rugged, adventurer depicted by Burt Lancaster in the 1950s, but exuding the good ol' Southern hospitality where food, drink and family are valued and savoured.
"In 1959, the brand was created to change the face of Bourbon," says Samuels. "People would come over to our house and drink, even Colonel Saunders who was a friend of my daddy would drop by, but outside of the local community no-one was really interested. But today there is going to be a room in the Smithsonian dedicated to US icons and Maker's Mark will be included with brands like KFC and Crispy Cream donuts."
Sitting in his hotel bar, he is relaxed with an open smile, talking animatedly about the cocktail challenge he judged the night before in London and reminiscing on the Samuels' family achievements. This is a flying visit, one of his "occasional" excursions away from the distillery.
"In 1953 when my daddy started Maker's Mark, we had nothing. By 1959 we had our first bottle. From a business point of view it was a terrible idea but it represents something uniquely American. It seems to have worked through tenacious execution. We put our heads down and 40 years later, we looked up and everything was ok. But it has been a long 40 years," he says.
Bill Samuels Snr had the vision of creating a "soft-spoken Bourbon" which would re-invent the segment. He decided to start from scratch and bought the Old Gristmill Distillery in Marion County, Kentucky for $63,000. For six years the company produced nothing until that fateful single bottle appeared.
Ironically the greatest threat to the brand's future is not its competitors, but spring water
"Zero for six years. Dad said we don't start until we get it right. I'm still the only distiller in the US that doesn't have an outside source of production," says Samuels Jnr.
That initial investment has certainly paid dividends because today the company is worth $60m. Its small production capacity makes Maker's a singular brand but the facilities have caused major headaches over the years as the brand's popularity has grown. Even today the distinctive bottle design, with its waxed top and neck (ever the family affair that was Mom's idea), is not produced automatically - each bottle is hand-dipped in the wax with only 38 bottles coming off the production line a minute in an age when 200 is the norm. For the first time since 1889, the company is going to expand and double its capacity.
"When I joined in 1967, we produced 16,500 nine-litre cases (9l cs), though 15,000 was in Kentucky. Then in 1975 I became president and we were at 70,000 9l cs but the market was slow. It may have been because no-one really knew about Bourbon or it could be because I was head of marketing and had no idea what I was doing," Samuels Jnr says frankly. "And now in 2001 it is 400,000 9l cs and ready to double."
When explaining how the distillery will expand, the failed space engineer in Samuels Jnr appears. The company is taking the back off the distillery so it can replicate the existing stillhouse as a "mirror image". Ironically the greatest threat to the brand's future is not its competitors Jack Daniels, Jim Beam or Woodford Reserve but spring water.
"There is a finite amount of spring water so the expansion can go only so far. We are nervous about changing the actual process in anyway when the alcohol is in vapour form, because this is a huge part of what the brand is. As we expand we will not change the size of the batch (200 bushels), the size of the equipment, where we buy the grain, we will use the same farmers just make them work harder."
Around 70% of the spring water passing through the production line is not used in the distilling process, so the company is now utilising this water through another source because after 25 years, the spring runs dry.
An example of the distinctive Maker's Mark marketing campaign
Samuels Jnr has spent the past six years planning this change for, ultimately, altruistic motives (though admitted in 25 years "it won't be my problem, it will be my son's") but also because the distiller is aware that the brand's success has put strain on its exports.
"The real problem is that we should have been ready for 400,000 9l cs back in 1995 but I needed a crystal ball. Back then I had no idea we would see this growth. So we have had to shutdown our duty free operations, and only supplied our core customers - a bit in Spain, a bit in the UK, a lot in Japan and Australia which were our first export markets. So that is why we have a limited international presence today," he says.
Since 1995, the distillery has only used half of its true capabilities and will never run on full capacity because the family want to grow the brand incrementally. Last year, 1,000 9l cs were sold in the UK but this year it will be 2,000 9l cs. Until 1999, the brand's growth rate was 5% but it has since jumped to 12%. "I would rather it stay at around 10%-11%," Samuels admits.
Here lies the root of the tension between the company and its partner of 19 years, Allied Domecq. The problems have been pace and direction. CEO Philip Bowman has said Maker's Mark is "the crown jewel" of the Allied portfolio and expects the growth rate to rise steadily in coming years.
Samuels takes a deep breath, and says this is a blessing and a curse. "It's a good thing and a bad thing. Bad news for us because they have a large and powerful organisation which is getting bigger and more powerful all the time under his (Bowman's) leadership but we have a real limit on mature whiskey.
"It puts a strain on us, and I have told him that it puts a strain on me by placing me in the centre of the storm. We have to be integrated. There would be nothing worse than to turn this wonderful, reinvigorated organisation into a global giant and have us sitting down in Kentucky working like an old production company left out of the loop. It works much better when I sit in the middle of things and say 'time out, let's take these things one at a time'".
Bowman's predecessor Tony Hales was renowned for his exuberance and motivation but the City always knew he lacked fundamental business skills. Diplomatically, Samuels is quick to praise the new man. "I really liked Hales but Philip Bowman is the right man to run Allied. I am at the epicentre of the US spirits industry just because I have been around since 1975, and meeting the management of Seagram, Brown-Forman, Bacardi-Martini, for the first time in 19 years with Allied Domecq I think we have the competitive advantage with this new leadership."
"I really liked Hales but Philip Bowman is the right man to run Allied"
Allied's specialist style-bar division, balance-spirits ltd, established last year receives the Samuels seal of approval. The previous night he had judged the Maker's Mark Classic Cocktail Competition 2001 at Sosho Match in London (which was won by Jake Burger at The Townhouse, Leeds) organised by the UK team.
Samuels was impressed by the winning cocktail, a modern version of the Manhattan, and feels mixology is the way forward. "Four years ago, the cocktails I tasted at a competition were awful. They had no idea how to mix a flavoursome spirit with other drinks because they were too used to just the white stuff. Now people are more aware of the texture of Bourbon. It is insane thinking it is just brown vodka which I saw four years ago."
There is definitely a reflective air about his demeanour as though he is ready to hand over to his son, who in fact runs Allied Domecq's Ohio office. "I should retire now. I am the inventor. I should have done Dad's job and he should have done mine, ironically. I would love to experiment with new types of Bourbon-making, like finding new woods or designing new pot-stills. We are in fact looking at some discarded American oak to experiment with," he says.
Giving up, however, is not in his nature. "Never compromise is my motto. We are absolute maniacs," he says with a grin.
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