How Companies Profit When We Don't Know the Difference
Last year, my neighbor went to see Foreigner and Journey in a co-headline bill here in the Bay Area. I thought it was funny she was so excited to see what are essentially two cover bands masquerading as the original act (and charging a fee as if they were the original act, to boot). Not wanting to ruin her buzz, I kept my mouth shut and said it sounded like a good time. She came back the next day talking about how much fun she had, how she and her friends had danced to all the hits, and how it took her back to high school hearing those two familiar voices. I couldn’t take it at that point, so I said, “You know that those weren’t the two original singers, right?” She stared at me with a blank expression. “Lou Graham. Steve Perry. They’re not in the band anymore. These bands have a couple of the original guys with some studio players filling out the gaps.” All of a sudden, my neighbor wasn’t as excited about her experience. “Well who the hell did I just pay to see then?” she cried.
There’s a reason why whisk(e)y companies pay millions of dollars for brand names. Most people don’t pay attention to what’s in their glass the way you and I do, but they do have brand recognition. “I’ve heard of Michter’s,” they say and they buy the Bourbon despite the fact that it’s no longer made in Pennsylvania. In fact, they couldn’t care less about where it was made. It’s not important to them nor has it ever crossed their mind. That is, it’s not important until you tell them they may have bought the lesser version of the original thing. No one likes to feel like they’ve spent money on something that wasn’t the real deal. No one wants to be the person who didn’t know the difference. “Oh, you didn’t know? Jeez, I stopped drinking Michter’s years ago after they closed the distillery in 1989.” That’s a line nobody ever wants to hear – even if they couldn’t tell the difference! It’s not about flavor at that point, it’s about personal pride. My neighbor couldn’t tell the difference between the old bands and the new ones. She had a blast at the concert. However, once she found out she paid big money for a karaoke jam session, she didn’t like it.
When big whisky companies start removing age statements from their whiskies and replace them with younger whiskies for the same price, it angers many of those who pay attention to booze. Nevertheless, most of the public won’t even flinch. For a majority of the population, there are more important things to do in life than follow the provenance of single malt whisky. Kids, soccer practice, what’s for dinner, paying the bills – this is what we focus on. "Foreigner got a new lead singer? Sorry, I missed that. I figured if they were calling themselves Foreigner then it was probably the original band." That’s where they get you. You “figured” it was the same because it was called the same thing. Eddie Murphy made an entire movie about this idea years ago called the Distinguished Gentleman, where his character wins a seat in congress because he has the same name as the dead senator who once filled it ("No one actually knows their congressman is dead!").
As SKU pointed out yesterday, the “Golden Age” of booze probably ended about three years ago. At K&L in 2009, you could walk into the store and get any whiskey you wanted for a reasonable price. Now we have to keep things in the back, start a waitlist, and email people if they’re lucky enough to give us their money. In 2009, there was enough whisk(e)y for everyone. Now supply is running short, driving up prices, and sending enthusiasts into a frenzy while trying to source their favorite juice. When shortages occur, companies take liberties with their brands. They drop age statements, use younger whisky to fill the bottles, replace one distillery with another, and charge us the same price. We pay it because we don’t know the difference. It has the same name on it, right? What more do you need to know?
-David Driscoll