#Lessonsfromthebest : Old-fashioned

Author’s Note: Over the last few weeks, I have been using this space to write about the lessons I learn from organizations with respect to their supply chain management, but not limited to it. I have also been attempting to convey my learnings as a narrative, and a story of sorts. So, if you want to learn something informative whilst having some entertainment, go ahead and read away! If you want to read my previous blog posts, click here! 😊

Shanmugeshwari, MBA '21

Amrita School of Business, Coimbatore

Think about an industry which needs to predict demand 15 years before the actual supply . . .

 

Whiskey! 🍸

 

Until the early 2000s, demand grew steadily -- blends dominated 80% of sales and single malts accounted for another 15%. US & EU were the main consumers.

 

Soon, emerging markets (particularly India which guzzles 50% of the world's whiskey by volume) entered big-time & demand soared. Fuelled by artisanal food movements and critical popularity from TV series (like the one featuring Don Draper in it) skyrocketed its demand. Consequently, product mix changed but the need for aging whiskey continued to give a bottleneck to the industry.

 

Maker’s Mark one of America’s premium Bourbon Whiskey Distillers witnessed this surge in demand and shortage in supplies. Essentially, a bourbon takes six years to age. Maker’s Mark had no choice but to water down their proof content, to meet the rising global demand. This in turn increased their supplies by 6% and they communicated this clearly to its loyal consumers.

 

That is when necessity mothered invention.

 

• NAS (No Age Statement) Whiskey was born. Instead of Age, brand managers focused on color, innovative flavors, location, techniques like maturing in three different casks & opaque bottling to pique consumer interest.

 

• Aged versions morphed into Collector editions & became dearer.

 

And then came the innovations!

 

Microbreweries bloomed.

 

Aging techniques were patented, and products were watered down to meet the demand surge.

 

An interesting example of how an entire industry addressed supply chain challenges by leveraging the attributes of pricing, branding & product innovation!