Wednesday, January 12, 2011

A Maker’s Shake-up?

For 35 years, Bill Samuels Jr. oversaw Maker's Mark bourbon as it matured from a regional novelty started by his parents to an international brand recognizable by its red wax seal.

Now he's planning to step aside for the next generation of his family to lead the rural Kentucky distillery, known for its distinctive square bottles that are sealed with red wax.

Samuels, 70, will retire as president and CEO of Maker's Mark on April 15, when he'll become chairman emeritus of the brand owned by Fortune Brands Inc., the company announced Wednesday.

His son, Rob, who was appointed chief operating officer last October, will lead the distillery in Loretto, the quiet rural community 45 miles south of Louisville that has been home to Maker's Mark since the 1950s.

Bill Samuels said in a phone interview with The Associated Press that his career was an "incredible journey" that turned his family's tiny whiskey operation into one of the most recognized brands in the world, helping it to surpass 1 million cases bottled for the first time in 2010.

Also last year, Maker's Mark introduced its first new product _ Maker's 46 _ a close cousin of the original but with a different aging method in the final weeks to give the whiskey a distinct taste.

When Samuels went home to help run the family business after earning a law degree from Vanderbilt University, the bourbon industry was struggling and the Maker's Mark brand was a well-kept secret outside the Bluegrass state.

"Back then, there wasn't such a thing as a premium bourbon category," Samuels said.

"There wasn't such a thing as anybody outside Kentucky either knowing what Maker's Mark was or caring about what it was. Those two things have changed dramatically in the last 43 years."

He was there when his father, Bill Samuels Sr., wrote a $35,000 check to buy the distillery in central Kentucky. The elder Samuels concocted the recipe that became Maker's Mark, and it was his wife, Margie, who came up with the idea of adorning the bottles with dripping red wax.

Other than the bourbon, it has been the wax seal that has caught the consumer's eye for decades.

Last year, a federal judge issued an injunction preventing a rival liquor company from using a dripping wax seal on the tequilas it sells in the United States, ending a seven-year legal battle.

Production of Maker's Mark started in 1954, but it wasn't until 1970 that the distillery turned a net profit, their son said.

"That's the definition of tenacity," Bill Samuels Jr. said.

The Samuels family was at the forefront of the premium bourbon category that revived the industry.

"That has released a lot of creativity at all of the distilleries," he said.

Now, the Maker's Mark distillery is in the midst of a nearly $110 million expansion that will increase production by 50 percent and double bottling capacity and warehouse storage.

Maker's Mark was sold to Hiram-Walker & Sons in 1981, then in 1987 was acquired by Allied-Lyons. Deerfield, Ill.-based Fortune Brands, whose brands include Jim Beam bourbon, acquired Maker's in 2005.

The constant has been Samuels.

"Bill Samuels reinvented the way bourbon was marketed at a time when the industry needed it most," said Matthew J. Shattock, president and CEO of Beam Global Spirits & Wine Inc., a subsidiary of Fortune Brands. "He forever changed the bourbon industry while building Maker's Mark into a global brand and staying true to his family's commitment to handcraftsmanship."

Eric Gregory, president of the Kentucky Distillers' Association, called Samuels an icon in the industry.

"His marketing genius, his international vision and his genetlemanly leadership has helped propel Kentucky bourbon into the global spotlight," Gregory said.

Max L. Shapira, president of Heaven Hill Distilleries Inc., the nation's largest remaining independent, family-owned and operated bourbon distiller, said he and Samuels grew up in Bardstown, Ky., as the sons of prominent bourbon families.

Shapira credits Samuels as being "instrumental in the renaissance of the bourbon category."

Maker's has had consistent double-digit growth for years, and has seen its export sales soar.

Rob Samuels, 36, called his father a "tremendous mentor," and said he'll continue to draw on his "institutional knowledge."

As for his greatest professional accomplishment, Bill Samuels said, "Staying the course in light of a lot of temptations to go off and do wine coolers and vodka and gimmicks."

Samuels is the seventh generation in his family to continue the bourbon-making tradition. After his retirement, he'll slide into a role as a chief brand ambassador and will pitch in with special projects.

"I'm not real good at vacation," he said.

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