BEAM - What Were They Thinking?

About a week ago (2/11), in a move right out of the saloon owners manual in the Wild West, BEAM announced that it would be cutting the alcohol content of its Maker's Mark bourbon to 42% from 45%.  The company reversed that ill-conceived decision today.

 

The initial move came about as the result of a high-quality problem - short-term demand in excess of supply.  However, high quality problems demand high-quality solutions, and the initial "solution" boiled down to serving everyone that purchased a bottle of Maker's Mark a watered-down drink.  It was a decision that would have had serious repercussions in 1890's Tombstone as well as 2013 Tribeca.

 

The company reversed its decision today:

 

"You spoke. We listened. And we’re sincerely sorry we let you down."

 

Note to management - all you had to do was ask, or use some common sense.

 

This note is admittedly more fun than actionable, but I think there is a lesson to be learned about managing the equity of a brand.  Maker's Mark is a great brand whose equity has been built up over many years - it should be tinkered with only after great deliberation and always with an eye toward enhancing the long-term value of the brand.

 

May your drinks never be watered down.

 

Call with questions,

 

Rob

 

Robert  Campagnino

Managing Director

HEDGEYE RISK MANAGEMENT, LLC

E:

P:

 

Matt Hedrick

Senior Analyst

 

 

 


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