Hidden Inflation Everywhere, From Watered-Down Bourbon To Horse-Meat Chili

Thursday, February 14, 2013
By Paul Martin

Wolf Richter

We’ve had an endless series of products whose ingredients have been cheapened in order to maintain the price. Consumers won’t be able to taste the difference, the theory goes. So, as the horse-meat lasagna scandal in Europe is spiraling beautifully out of control, we’re now getting hit where it hurts: Maker’s Mark is watering down its bourbon.

Unlike the horse-meat folks, Maker’s Mark announced it. They even had an official reason. “Fact is, demand for our bourbon is exceeding our ability to make it, which means we’re running very low on supply,” said the missive that COO Rob Samuels sent to his customers. They’d add water to the remaining batch—it would lower alcohol content from 45% to 42%—so that there’d be enough for everybody.

The uproar was immediate. The company, a subsidiary of Beam, Inc., though still run by the founding family, had to deal with the clamor. Chairman Emeritus Bill Samuels, Jr. crafted the response. The company’s focus over the past 50 years has been on “product quality and consistency.” And the primary measure of that consistency was “the unique Maker’s Mark taste profile,” he wrote. “That’s all that truly matters in the end.”

So why not just run out and play on scarcity? Knob Creek, my personal favorite and also a Beam subsidiary, had done that successfully in 2009. Samuels did not provide an answer. Or why not raise the price to lower demand instead of watering down their bourbon? Well, he wrote, “We don’t want to price Maker’s Mark out of reach.”

Fighting inflation by watering down bourbon. But there was nothing to worry about. He and Rob personally tested batches of watered-down bourbon, and they all had “the same taste profile that we’ve always had.” Their Tasting Panel and “structured consumer research” agreed: “there’s no difference in the taste.”

The Rest…HERE

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