If you’ve been on twitter or Facebook over the weekend, perhaps you’ve seen the stories about Beam, Inc.’s decision to reduce the alcohol content in their Maker’s Mark whiskey, and the subsequent furor and reversal of the decision.
Economics and entrepreneurship are passions of mine, and I met the Maker’s Mark executive team many years ago, spurring my interest in America’s original spirit, so this story caught my eye. It’s a simple illustration of supply and demand, and of a failure in creative problem solving that led to the marketing scramble of the weekend.
During my days as a professor I did a lot of executive education. Maker’s Mark President Bill Samuels was at such a session. Initially he questioned the value of entrepreneurship education. I won him over, visited in Kentucky and now Maker’s Mark is a staple in the Spinelli cabinet.
Whiskey and bourbon are experiencing a rise in both domestic and international demand. Due to the aging process behind Maker’s Mark in particular, production of product that goes on the shelves today happened in 2007. This alone puts the company in a sensitive position as they gauge popularity and demand years in advance. They seem to have miscalculated the amount of product the world would be thirsty for today, and thus were faced with the choice to supply a shortage, or to dilute their product.
Their choice has been an unpopular one receiving passionate coverage both in the press and social media. While I applaud the outcome of the situation – the reversal of the decision shows that they listen to and understand their loyal customers – I return again to the lessons of both the company’s choice and marketing.
For any business, decisions don’t happen in a vacuum. What makes sense from a distribution standpoint may actually hurt the bottom line and damage the product’s reputation. What makes sense as a marketing decision might not be deliverable as a product. A well-informed company practices holistic problem solving to make sure that all disciplines feed into solutions that are true to the brand, and pleasing to the customer.
We are proud of our transdisciplinary education here at PhilaU, and of the Kanbar College of Design, Engineering and Commerce curriculum in particular. This is a classic example of why our students are taught to think in cross-disciplinary ways – so they can do so in the professional world.
I respect Beam, Inc. for listening to their customers and rectifying what could have been a damaging decision. I hope that in the future they are more creative in solving their market demand problems. I know some graduates who could help them out in that department.