The End of an Era: Jim Rutledge Retires
When I heard the news that Jim Rutledge was retiring, I was quickly taken aback. I just kind of sat at my desk for a moment and tried to process the announcement, wondering how long it had been since Jim and I had last spoken. As many of you know, the Four Roses master distiller is one of my heroes in the business; a true professional in every sense of the word, and a man who is every bit as skilled on the customer service side of the trade as he is on the technical side. He's been a mentor for me. He is kind, forthcoming, patient, and humble, and he's someone who has never failed to offer assistance when I've needed help over my career (which has been often). Part of me was happy, knowing that Jim—tireless worker that he is—was now free to take some time for himself. Another part of me was sad—the selfish, stubborn part of me that wants Jim to keep making Four Roses Bourbon forever. Mixed emotions aside, I knew what I needed to do right then and there. I needed to pick up the phone, give Jim a call, and say congratulations.
In doing so, I asked Jim if we could turn that conversation into a short little Q&A session about his big decision, the current state of the company, and what Jim saw for the future of Four Roses. It may be the end of the Jim Rutledge era, but its clear that Jim thinks the rise of Bourbon as a global phenomenon is just getting started. Check out what he had to say below:
David: First off—let me say congratulations on the big day ahead. You’re retiring September 1st according to what I’ve read. If anyone has earned a ride into the sunset, it's you.
Jim: Thank you. As you can imagine it was a challenging decision—one I started thinking about quite a while ago. I told Taiji Abe, our former CEO and president, at a casual meeting in 2014 that I was considering retirement at the end of the year or early 2015, and while I was talking he was sketching something—I wasn’t sure how much attention he was paying to me (laughs). Then he held up a graph and said, “Jim-san, we need you ten more years.” I just laughed. I asked, “Do you know how old I am? In ten years I just hope to be breathing.” That was the start of it. I submitted a letter to Taiji-san this year, the first part of March, when I found out that he was being called back to Tokyo for assignment, and we were going to get a new CEO. In my letter I explained that I was making this announcement now—effective July 1st of this year—because I don’t want the perception to be that I’m unhappy with the new president. If I made the announcement after his or her arrival, it might appear I’m doing so because I’m unhappy. That forced the issue, so I made the announcement in March.
David: Did the new CEO try and convince you to stay ten more years as well?
Jim: When I submitted my letter I had no idea who the CEO would be. It ended up being a female—her name is Satoko Yoshida—and, I’ll tell you what, if I had waited to make my decision until she got here I might have stayed on (laughs). She’s incredible. She may end up being the best we’ve had. Time will tell. I’ve really enjoyed working with her in the short time we’ve had and I think she’s going to be great for the company. When we first had a meeting to discuss my retirement she suggested a five year plan. Then she came back with a two year option, but then I countered with, “How about July to September?” (laughs), so we agreed that I would continue to work as much as Four Roses needed me to. After the 1st, I said I could work with marketing to do tastings and bottle signing events, things like that. It’s up to them how much they want or need me after I retire.
David: I’m sure they’ll want you at all of their events. Especially considering your esteem in the industry.
Jim: Well, marketing might choose to go in a different direction—away from me. We’ll have to wait and see. I’m ready for whatever awaits.
David: Do you really even need marketing right now considering most Bourbon distilleries can’t even keep up with the current demand?
Jim: (laughs) I think you’re right—if we didn’t have a marketing team we wouldn’t notice even the slightest drop in case sales. When the demand is greater than supply, what can you do?
David: What have the real changes been over the last five years since Bourbon really began to take off on a mainstream level? And where do you think the industry is going?
Jim: In terms of the industry, I believe we’re just getting started. It’s always been my opinion—I’ve voiced it for quite a few years—that our industry hasn't really changed that much relative to the distillery process, but with the introduction of premium Bourbons, single barrel, and small batch Bourbons, people really began to take note of Kentucky Bourbon—namely how good it is. Then with social media and the internet, people could find out more information about new Bourbons, find a blog, and get the word out around the world by tomorrow. There are no secrets anymore. It’s not challenging to spread information in this market. I think the consumers—both domestically and globally—have begun to realize there’s another whiskey out there besides Scotch, and it's Kentucky Bourbon. I think we’re just scratching the surface. We’ve got years of growth ahead of us before we begin to level off.
David: Do you mean years of growth before production catches up with demand?
Jim: No, years and years before the growth of Bourbon around the world—as in the addition of new consumers and new customers—will be begin to level off. It’s still so new to so many people, and when people try it, they like it. It might not compare to anything that they’re used to, and they get hooked right away. I might be a tad biased, but I think Bourbon is absolutely fantastic. People like it, it’s great for mixed drinks, and it has a long, long way to go in terms of reaching new consumers before that demand levels off.
David: How do you contrast reaching new consumers with finding the supply necessary to reach them? Isn’t there a point where you can’t grow anymore simply because you don’t have enough to sell? Or maybe that will fix itself later?
Jim: It seems like everyone is expanding—increasing their distillation capacity, increasing their storage warehouse capacities—and eventually that will catch up with demand. Right now demand is greater than supply, but I still hear people debate this point and ask, “Is it really true, this whole Bourbon shortage?” Some people say yes, some people say no. I read something a few weeks ago about how Kentucky whiskey distilleries are increasing their capacity for production, and there was a comment that said, “See? There is no shortage.” But I still haven’t learned how to make a six year old Bourbon in a day, and until I do we're going to be short. We’re increasing production, but we’ve got a long way to go before we catch up. Eventually it will happen, and there will be peaks and valleys after that, but I think it will continue to grow.
David: When I was talking to you earlier, you said you were lowering the minimum age requirements of the private barrel selections. Obviously in response to greater demand.
Jim: Yes, our minimum age for private barrel selections used to be nine years of age. We’ve reduced that to eight years, but even now we have two of our ten recipes where there aren’t even enough eight year old barrels. So it didn’t really even make a dent. We’ll probably have more OBSK available in December. A couple Fridays ago we used the last OBSO barrel. We’re trying to find out when we’ll have more barrels coming online, but I’m not sure when that will happen.
David: And when those formulae do come back online, they’ll be only eight years of age right?
Jim: That’s right. That’s the case for all ten recipes now. The demand is so great that it’s stretching our inventory thin. And now we’re struggling just to keep up with eight years! And that will continue over the next few years until our inventory grows and we can start working our way back toward nine years of age. We’ll get there eventually, but it’s a ways down the road.
David: What do you think the best strategy is in terms of managing supply? Some distilleries are choosing to remove age statements—which isn’t really an issue for you because none of the three main Four Roses selections have age statements. Others are choosing to just remain out of stock with nothing available in the market until those products can come back online at their required age statement maturity. What would you do if you had to make that decision?
Jim: I actually don’t know which is better. I’ve never been a fan of age statements. I wouldn’t ever want to get to a point where we were waiting on birthdays for barrels—that could possibly have a negative impact on quality. It sometimes happens that you wait for a specific date to arrive and the Bourbon has become too woody; then we can’t hit our target flavor profile because the whiskey doesn’t match what we’re looking for. My preference if I were in this situation—and remember I’m a distiller, not a marketing person—would be to remove the age statements and instead allocate volumes. If you don’t have enough barrels to produce a specific age, then remove the statement, give me younger barrels, and let me see if I can match the flavor profile with the younger Bourbons. As long as we can maintain the quality—that’s key in my book. An age statement is a marketing tool. What’s most important to me is what goes into the bottle, not what the number says on the label.
David: I haven’t noticed a dip in quality in the three standard Four Roses expressions—the Yellow Label, Small Batch, and Single Barrel—since the boom hit.
Jim: We’ve worked hard at it. But—I’ll tell you what—it has become a challenge, and I believe it’s going to become even more of a challenge over the next few years. We’ve always tried to mature the barrels to the peak of their maturity. That’s how we survey which casks will become part of which expression—we start at three and a half years and keep going from there. As our inventory continues becoming younger, it’s a challenge to maintain the same exact level of quality. It’s going to have to change some. The goal for us is to make sure it’s not a perceptible change by the vast majority of consumers.
David: You think the next two years will be the middle of the crunch, and that things will start to even out towards the end of the decade?
Jim: For us, yes. I think by the middle of 2017 we’ll start to catch up and then we can start adding more aged stock to the supply. But to do that we have to make sure we keep growth in check over the next couple of years. We can’t let our growth at Four Roses go unchecked and outgrow our barrel pacing.
David: Hence why you’re requiring retailers and restaurants to actually come out to the distillery if they want to pick out a cask.
Jim: Exactly. That’s the only reason. We just don’t have enough inventory with Mandy sending out samples to keep up with demand. It locks up our available stock when samples are out in the field.
We continued to talk after I turned off the recorder, and Jim mentioned that he'll still make himself available to Four Roses for special events and consultation should they need him. So rest easy knowing that you still may see Jim around the industry after September 1st. He also mentioned that he now needed to buy a car, a phone, and a computer because he's always used company equipment during his tenure. "My son-in-law is going to order me a PC," he said with a laugh. It's clear that Jim Rutledge truly lived his work. It's a side of Jim we Bourbon drinkers should all be thankful for. What's more important, however, is that you take a moment the next you pour yourself a glass of that delicious Four Roses Bourbon you have at home, and give thanks to the man who spent the last forty-nine years of his life working to make that moment just a bit more enjoyable.
Thank you, Jim. On behalf of K&L, our customers, and myself—we're really going to miss you.