Global Dynamics of the Wine Industry- Fall Compressed Course 2017

I really enjoyed our session last week on the whisky industry, especially when the conversation turned to Balcones Distilling. Balcones is located near my hometown in Waco, TX, so I have been fortunate to follow their story from the very beginning--and even sample their now infamous Single Malt before it exploded in popularity. 

Martin Daraz pressed us on Friday to think about how a distiller can cut through the noise in an increasingly crowded industry. Balcones managed to do it. What lead to their success? Even after some tumultuous times that resulted in the founder being kicked out of his own company, Balcones is a shining success in the craft distilling industry. I think their success boils down to three factors:

1. International recognition. In 2012, Balcones won the "Best in Glass" competition in the UK, competing head to head with established single malts from Scotland and around the world. This moment has often been compared to the 1976 "Judgement of Paris" that put Napa on the map. Overnight, Balcones became backordered for over a year on their single malt and become a must have for whisky connoisseurs. 

2. Consistent quality. From time to time brands are going to win competitions, but I think what happens next is just as important. Whoever spends the money and waits over a year for an expensive craft whisky better be happy with what the get. Thanks to distiller Chip Tate's fanatic push for quality, customers who sampled the Single Malt after the awards found the same high quality spirit that won the competition. 

3. Differentiated products. For a few years, it became nearly impossible for customers to get their hands on the Single Malt, so customers turned to Balcones other whiskys. Balcones offers about a half dozen other varieties and they are not afraid to be bold. One whisky, my personal favorite, the Brimstone, is unbelievably smokier than any other whisky I have ever sampled. When I did a tasting at the distillery last summer, our guide told us that 4/5 people hate it, but for 1/5 people it is their favorite whisky. I am one of the 1/5, and Brimstone has been the whisky I have purchased the last three times I bought a bottle. The lesson here for a craft distiller is to be bold. More sales will be driven if you are 20% of customers #1 choice than if you are just likeable by most drinkers. In an increasingly saturated space, boldness is rewarded.