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ONE-ON-ONE - April 2004
by Ed G. Lane
'A Simple Objective – No "Acquired Taste" Required'
Maker's Mark's Bill Samuels Jr. waxes philosophic about making great bourbon
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Bill Samuels Jr.
Bill Samuels Jr. comes from a long line of Kentucky distillers, beginning with Robert Samuels Jr., a captain in the American Revolution who was the first in the family to make corn whisky. Generations later, Bill Samuels Sr. created what is now known as the distinctive taste of Maker’s Mark. Bill Samuels Jr. joined the Maker’s Mark company in 1967 and in 1975 assumed the position of president and chief executive officer. Samuels’ business acumen has been recognized on both a state and national level: He was selected as the Kentucky Entrepreneur of the Year in 1995, has served as the chairman of the Kentucky Chamber of Commerce and as the Kentucky representative for the U.S. Chamber of Commerce board of directors. He continues to be in demand as a guest lecturer, speaking at businesses schools around the country, including Harvard, Wharton, and Columbia, among others. |
Ed Lane: When did the old Samuel’s Distillery – now the Maker’s Mark Distillery – start operations in Loretto?
Bill Samuels: In March of 1953, my dad – Bill Samuels, Sr. bought what is now the Maker’s Mark Distillery for about $36,000. His primary innovation or fundamental idea was that he was going to create a bourbon for “people that didn’t like bourbon.” My dad’s family had been successfully making and marketing bourbon in Kentucky since the time of Daniel Boone in the mid-1780s.
EL: Did your dad have a specific business plan?
 BS: He was very clear that there were two components to his plan. One, the bourbon had to taste good. Kind of a simple objective – no “acquired taste” required. He also wanted to bring a degree of sophistication to what would become the brand. He wanted it to break away from the cowboys and Indians/ruffian image of bourbon. That was the idea.
The problem was nobody gave him much of a chance of it working. At that time, bourbon was selling about 19 million cases. It’s about 9 million cases now. So you could say well, he’s been a dismal failure. The fact is there is the bourbon category that Dad started and other Kentucky distilleries have successfully come to. I really admire the other bourbon makers on two fronts. They’ve done a great marketing job, plus the whiskeys that are being sent to market from the various distilleries in Kentucky are just excellent.
What I would call the “era of modern bourbon” started when Dad made his first batch on February 26, 1954. Somebody had to go first and say, “We’re going to create a new definition of bourbon.”
EL: How significant is “modern bourbon” to the industry?
BS: Right now that category, nationally, is about 750,000 cases. Maker’s is about 550,000 of that category. You would think bourbon sales are going down pretty dramatically, but that’s old bourbon. Modern bourbon, for at least the past 10 years, has been in pretty rapid double-digit growth. They are very different products and, in fact, very different markets.
EL: The unique bottle and dipping it in the wax, what year did Maker’s Mark start that?
BS: Well, Mom (Margie Samuels) started playing around with dipping the bottles at home back in ’57. Dad did his first bottling, but he only did one barrel; it wasn’t fully matured in the spring of ’58.
EL: Your dad bought the distillery in 1953. He then had to make some whiskey and let it age. So the first batch was bottled in 1957 or 1958.
BS: We bottled one barrel only for the liquor convention, which was in Chicago, so that Dad could at least have something to talk from. Maker’s didn’t go on the market until the fall of ’59, which would have given it six summers of aging in the warehouse. That’s the honest way to do it.
 EL: At what point did you think your brand would be successful?
BS: Maker’s Mark got a little help from the Wall Street Journal back in 1980. Once the article was published, our progress was really steady. I think the ultimate compliment was when our dear competitors recognized that, “Oh my God, this (modern bourbon) is going to work. We need a piece of it.” And I think when other distillers jumped in as early as ’85 – more recently in the early ’90s – it really added a dynamic element. And I would suggest that within five years, when you say bourbon to people randomly across the country – and even across the globe – their idea is going to be the modern definition of bourbon that Mom and Dad created back in the ’50s.
EL: Based on previous articles we’ve written in The Lane Report, one would get the impression that Maker’s Mark started out using public relations rather than advertising.
BS: Dad wouldn’t let us advertise. He wouldn’t let us do anything that appeared to him to be aggressive. He thought it was in bad taste.
 EL: Your PR firm was Wenz-Nealy which is now New!West Agency. Did they help you get the Journal story placed or did you just get lucky?
BS: Well, the luck was that Rod Wenz and the reporter for the Journal – Dave Garino – had worked together in somewhere like Peoria, Illinois, at the same newspaper. So, they were friends. The Journal guy was coming in to Louisville from St. Louis to do the Humana annual meeting. He also had the editorial responsibility to be on the alert for interesting alcohol beverage stories – most of which were negative at the time. Rod mentioned he might, if he had some time, want to go visit the distillery and meet my father, which he did. He fell in love with both my father and what he was trying to do. What started out as a 30-minute visit, ended up three days later. Dave was still there.
EL: Prior to the article in The Wall Street Journal, had the distillery been making a little money, breaking even, or losing a little? How was business?
BS: In 1967, Maker’s had had eight years in the marketplace. We sold 17,000 cases that first year I went to work for the company. I believe a little over 16,000 of that was in Kentucky. So, we had no business anywhere outside of Kentucky. Kentucky was emerging by word of mouth.
EL: Back in 1967, how much did a bottle of Maker’s Mark cost?
BS: Oh, I know exactly what it was. It was $6.79 plus sales tax which made it $7.00.
 EL: After the Maker’s story broke in The Wall Street Journal what happened?
BS: Other than sitting around in a rocking chair waiting for people to come talk to us, this was Maker’s one chance because people were coming by the thousands trying to find a bottle. Our product didn’t have much distribution out there. A little bit, at the time, in Texas, Tennessee, Indiana and Florida. Most of the readers of The Wall Street Journal in 1980 were not able to find a bottle. I was astounded at the number of them that went looking. So that was the first evidence that it would be possible to break through the dying limitations of bourbon. The people that were looking were young, educated, professionals.
EL: How did you fill the orders?
BS: We started answering the phone. This is like about third grade response-time stuff. But we did put in more phone lines. The distillery was getting, on average, a thousand calls and 2,500 letters a week. Dad and I spent 100 percent of our time for the first couple of months on the phone and answering letters. We had figured out where stores were at different locations around the country – not very strategic, you know. My sister lived in Minneapolis; there was a store in Minneapolis. Some of Kentucky’s political delegation had managed to locate a couple of stores in Washington D.C. for us. We had about 25 retail locations around the country.
It was great fun dialoguing with people. It generated a lot of other stories in local markets. It also generated confidence by distributors because people were going into stores [and] stores were asking the salesmen, salesmen were asking the management – these are people that heretofore had not been interested in carrying Maker’s Mark because the distributors knew better than anybody that bourbon was finished.
EL: After the Journal story broke, did Maker’s sales go up a lot or a little?
BS: No, sales didn’t go up much. What went up most was the nuisance factor. Jim Lindsey, vice-president of Doe-Anderson at the time, was the guy that we had hired to really work with me, mentor me, teach me about how to create a world-class brand. When the article hit, we now had people talking to us, so we could talk back to them.
That’s when Lindsey got the idea that Dad and I should pen letters in The Wall Street Journal. We did that for about five or six years and that put Maker’s on the map in a small way. At least it gave Maker’s instant credibility with distributors and restaurateurs. It started this path toward becoming a national brand at what had to be low volume because of the way we make our whiskey. We don’t have a two million case brand that we can draw from when we run out of product.
EL: For our readers, would you explain what you meant by “pen things for The Wall Street Journal?”
BS: When we would do an ad in letter form in the Journal, which Dad and I would sign. The first one was just thanking people for their interest and how shocked we were; realize the phone lines are busy – there’s only two of us sitting around trying to do all this – so sort of bear with us, we’ll try to help. Then after four or five months, some people actually started being able to find a bottle here and there. They got so excited, they would write us about their trials and tribulations of the search, some ending in actual discovery. And of course, that just became the next layer of the communications.
 EL: Some people would call you contrarian – that you like to do everything contrary to the standard to set your brand apart from the competition. Can you think of two initiatives in the marketing area that were extremely successful and unusual?
BS: We were limited in the beginning by the fact that we didn’t have any money and Dad was adamant about not getting up in people’s faces. Never, ever, ever, in my 37 years here have I wanted to ever be like anyone else or any other brand. That’s kind of a personality thing.
I’ve done some pretty stupid ads because I tend to pull the trigger too quick. Running an ad with a dead horse, his feet sticking up in the air, in Lexington is probably not the brightest thing I ever did, but it got everybody’s attention. The most recent ad that got an international firestorm going was right after the Enron/Arthur Anderson fiasco and we had just bought our first billboard in Times Square in New York.
I did the headline – “It disappears faster than a big five accounting firm.” Well, needless to say, they saw it. I got calls from all five of the CEO’s within about three days. And they reminded me of how many of their employees had been Maker’s Mark drinkers. Well, they weren’t amused. A bad ad is like a bad haircut; it will eventually grow out.
EL: How would you describe “modern bourbon”? I’ve heard it called “ultra-premium” and “super-premium.”
BS: It’s every bourbon brand that’s priced at Maker’s Mark or higher – that covers them. And every one of them is newer than Maker’s Mark, which means they are a reaction to the grip that Maker’s was able to get in the market. Now they’re coming and adding their own special value in different ways which creates even more conversation.
EL: Today, do you still use the same ad agency or have you switched?
BS: We have had Doe-Anderson, the advertising agency here in Louisville for 32 years. [They are] absolutely marvelous, they get stronger by the day. We’ve never had a fight and I’m pretty aggressive and they’re pretty aggressive. We’ve only had three account managers – they have all been super-stars. It’s like the best marriage in the world. I’ve found when you work with consultants, you must pick good and then you treat them with respect – like family. The 50th anniversary celebration was restricted to our employees plus Doe-Anderson. See, they were one exception.
EL: Describe Maker’s 50th anniversary celebration.
BS: It was great fun. I’ve been wanting to do that for years. It was utter nonsense. We employ about 80 people. The majority of them are under 40. Gosh, we spend so much time going forward, solving problems, fixing stuff that we never spend any time reflecting. So, that day was just one of reflection.
Lt. Governor Steve Pence came down to do a proclamation that Governor Fletcher put together. I’ve got some Pences in my family, all of whom are criminals – and I had pictures of them. One of them, Uncle Donny Pence rode with the James Gang and looks an awful lot like Steve Pence. So, we jerked him around a little bit!
EL: When you visit bars in major markets you’ll often see several of the premium bourbons setting up on the bar – just like scotch.
BS: Isn’t that wonderful? I love it. Maker’s never sits up there because it moves too fast. I don’t like that, but it’s reality. And eventually, if this really works, other bourbons won’t be up there either, they’ll be down at the main part of the bar. I’ll be clapping as loud as anybody.
Ed G. Lane is chief executive of Lane Consultants Inc. and publisher
of The Lane Report.
edlane@lanereport.com
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