Jim Beam Trying to Stay Edgy at 216 Years Old
BY Gina Pace
After revenues soared in 2010, Beam split from Fortune Brands to be traded publicly this month. And it's taking a shot at serving new drinks to a few unusual markets.
Together with hundreds of employees, Jim Beam family distiller Frederick "Fred" Booker Noe III celebrated the 75th anniversary of the historic Jim Beam Clermont, Ky., facility, home of the world's number one-selling bourbon.
Can there be a 216-year-old start-up?
Bill Newlands, president of Beam North America, believes it is possible. As one on the most recognizable liquor brands in the United States—Jim Beam—gears up for another phase, the company is trying to stay quick and nimble while promoting its well-known brands.
The company, which includes brands such as Maker's Mark, Cruzan Rum, and Suaza Tequila, split off from Fortune Brands this month to be publicly traded company under the name Beam Inc. Fortune Brands, which sold its golf brand Titleist in July, will continue to house home goods and security companies, such as Master Lock and Moen faucets.
While Fortune Brands has been hit like other suppliers of home goods by the lack of new home construction since the onset of the recession, sales for spirits rose 2.3 percent to $19.2 billion last year, according to the Distilled Spirits Council of the United States. During 2010, Beam's global revenues increased 7.9 percent to $2.7 billion.
"It was a good time to separate businesses and each would be better served," Newlands says. "We didn't have a lot in common with the other sectors."
Part of the strategy is keeping people like Frederick Booker Noe III, Jim Beam's great grandson, and Rob Samuels, the grandson of the founder of Maker's Mark, at the forefront as a brand ambassadors for the company, while quickly rolling out a series of new products to bring in a new audience.
Newland says a big portion of that audience is a population plenty of big spirits companies ignore: women.
"Even with vodka, where half the consumers are women, the big companies seem opposed to women," Newlands says. "They market to men and just assume that women will come along for the ride."
In the past six years, Beam has added 11 of its 14 priority brands, including the much ballyhooed addition of reality TV star Bethenny Frankel's Skinnygirl Cocktails. The margarita variety quickly became the No. 1 selling ready-to-drink cocktail, and the company recently added white sangria with plans for a white cosmopolitan drink.
Determining that women are more likely to favor drinks with a lower alcohol content and flavored spirits, Beam also launched a less potent variety of Courvoisier cognac blended with red wine, Pucker-flavored vodkas, a variety of Effen vodka inspired by the cucumber water you'd find at spas, as well as Red Stag, a cherry-flavored bourbon made by Jim Beam.
And while about 80 percent of bourbon drinkers are men, Noe says that about half of Red Stag customers are women—and that it's helping introduce them to the bourbon category. In the last five years, Noe says he's noticed that women are coming in groups to tastings, where before, they would only visit if with their husband or boyfriend.
It's not that Beam is leaving men behind. One uber-macho product recently released is Jim Beam Devil's Cut, which is made by agitating the six-year-old bourbon left behind in the wood, called "sweating" the barrels, which produces a whiskey with more tannins and wood flavor.
"What evaporates during the process we call the angels' share. So this is the devil's cut," Noe says. "It's off to a roaring start. Bartenders just love that they can make a drink with the word 'devil' it in."
Introducing new products, such as Devil's Cut and Red Stag, under the Jim Beam name, which dates back seven generations, can be a "crapshoot." Noe remembers during the 1970s vodka heyday, that Beam tried to compete by lightening up their whiskeys with product names like "White Balloon" and "Honey Go Light."
Remember those? Not many people do—and Noe laughs when he talks about how his dad "cursed a lot" about those failed brands. But he's willing to risk it with new ventures.
"I was the biggest naysayer in the company when it came to Red Stag. But it's cool that it got new people into bourbon," Noe says. "And I like to gamble."