Why are they diluting the bourbon?

Numerous readers have requested that I cover this topic, and here is one report:

Maker’s Mark, the Loretto, Kentucky, bourbon manufacturer, has the sort of problem that every consumer-products company wishes it had: too much demand for too little product. But the company’s solution might surprise the very consumers demanding its product—adding water to its existing supply of bourbon, thereby cutting the alcohol content in each bottle from 45 percent to 42 percent.

Let me first note that I have zero institutional knowledge of bourbon.  I have never tried bourbon (I have eaten in the excellent restaurant Bourbon Steak), and even worse I have never read a book about bourbon, but here is one hypothesis.  Could it be that future buyers, who have never tried the older 45 percent will accept the 42 percent as the normal taste?  (The company might even fool some of the current drinkers.)  In that case, if the company has a large flow of future buyers, relative to the current stock of buyers, this won’t even count as a price increase/quality degradation for the future flow.  A direct price increase, in contrast, would be a price increase for everyone, present and future.

This explanation, however, runs the risk of being “too good” (read: not good).  If it is that easy, why didn’t they degrade the quality in the first place, until reaching a margin where framing effects won’t make up most of the difference?

Caveat emptor!  Ask an expert instead.


Comments for this post are closed