Friday, October 31, 2014

George Dickel, No. 8 vs. No. 12

stats:
George Dickel No. 8, Tennessee Whiskey, 40%, $22
George Dickel No. 12, Tennessee Whiskey, 45%, $24

In spite of some economically uncertain times, the worldwide whiskey industry has been enjoying a sustained boom period for upwards of a decade now. But even the best of times can be terribly challenging for an industry whose products see years of aging between their making and their eventual sale. Distillers can’t just increase production levels in lock-step with demand; if that demand vaporizes by the time the whiskey reaches maturity, they risk a logistical nightmare.

Over time many producers have learned to temper their reactions to consumer trends. Between Prohibition, the two World Wars, the Great Depression, the economic recessions of the 70’s and 80’s, and the rise in popularity of clear spirits in the latter half of the 20th century, the last 100 years has seen far more bad times than good for the whiskey industry. It’s understandable that they’ve been a little slow to react to the longest sustained upswing in demand since the post WWII years.

Over the past few years though, we’ve gotten to the point in the American whiskey industry where demand is truly outstripping supply. While dramatic price increases have largely been the domain of the Scotch whisky industry over the last 10 years, American whiskey producers have only recently started to go down that path. They are trying to keep the rising prices somewhat in check though. This is primarily being accomplished by stretching inventory through lowering proof and age. Consumers sometimes view these tactics as de facto price hikes, and it has been very interesting to see how the various companies have dealt with imposing these changes and managing the impact on their images and public relations.

This post is the first in a series of four that will consider different examples of how distillers are attempting to work through their supply issues. Actually, the first case is more of a prelude: a situation where oversupply was followed by a shortage, which happened well before the current boom started causing headaches for most producers.

The George Dickel brand became part of the portfolio of a company called United Distillers in 1987 after that company acquired Dickel’s former parent company, Schenley. In the early 1990’s, United Distillers selected several of its American whiskey brands, Dickel among them, to target for major sales growth in Europe and Asia. Production was ramped up to meet the future demand that was expected from the marketing push.

Unfortunately that demand never really materialized, at least not to the extent that had been forecast. But United Distillers was a very large company that sometimes lacked focus and oversight with its many brands; a situation which led to the overproduction at Dickel continuing unabated for several years longer that in should have.

If the distillery had been producing bourbon, this wouldn’t have been as big of a big problem. The excess could be blended into other, better selling brands owned by the parent company, or even sold on the open market to non-distiller producers. However, Dickel is Tennessee Whiskey, a category unique amongst themselves and Jack Daniel’s. So the distillery was essentially stuck with whatever they had overproduced.

In 1997 Guinness (the parent company of United Distillers) merged with Grand Metropolitan (which had a large European spirits portfolio), forming Diageo. The new company had a lot of debt which required some cost cutting and consolidation. They decided to move their focus away from American whiskey and sold off most of those assets by early 1999, only retaining two brands; Dickel and I. W. Harper (in recent years Harper’s distribution was limited solely to the Asian markets, so you’re unlikely to see it in the U.S.).

The Dickel brand had a loyal following in certain regional markets in the U.S., but overall was not that well known. With the warehouses filled to capacity, production was stopped in February of 1999, the distillery was closed and the marketing budget reduced to zero.

Dickel’s core products, No. 8 and No. 12, carry no age statements, but the distillery does have a target age range for the whiskey that goes into each. With years of production that far outpaced subsequent sales, all they could really do was let the age of the whiskey that they were putting in the bottle slowly creep upwards. The retail price of Dickel was already pretty low, with the No. 12 at $14 and the No. 8 at $13 (as of 2001). Increasing prices wouldn’t help the oversupply situation, so they stayed low.

The stuff was an incredible bargain for a good number of years, which also means it probably wasn’t very profitable. It would have made sense to fire up the closed distillery for a month, or even a few weeks every year to ensure some product continuity and avoid a big gap in the age of the product. But Diageo claimed that the Dickel distillery needed some costly repairs before it could produce whiskey again, and that they wouldn’t make the investment until they were ready to go back to full production. Whether that is true or they were purposely trying to create a shortage as a tool to increase prices is hard to say (but either way, the price hikes did come). Finally, in September of 2003, the distillery was reopened and firing on all cylinders.

Diageo did reinstate a marketing budget for Dickel in 2002. That may have paid off in a big way or it may have been the case of a rising tide lifting all ships, as American whiskey in general was in the midst of a major resurgence. Either way, demand surged in the ensuing years.

But whatever the cause of its new found popularity, that four and a half year gap in production was coming back to haunt the company. By mid 2007 a shortage of the No. 8 was becoming apparent. Of course whiskeys sell at different speeds in different regions, so supply dried up at different times around the country. Late in 2007 a new product called Cascade Hollow was introduced. It carried an age statement of 3 years (most American whiskey categories require an age statement if they are under 4 years old), but its label was almost identical to that of the No. 8, and they shared the same retail price.

By mid to late 2008 they had switched the Cascade Hollow’s black label over to a new red label. This change could have been in response to complaints of deception, or because the company decided to keep the new whiskey around after reintroducing No. 8 and wanted to avoid confusion.

At the end of 2008, after an absence of more than a year, George Dickel No. 8 was back on store shelves, now with a significantly higher price of about $22. The Cascade Hollow bottling remained as a lower priced part of the Dickel lineup until 2013. There was never an outright supply interruption of the No. 12 bottling, but there was a period around 2009 where inventory got pretty tight and it could be hard to find in some areas. Between early 2008 and mid 2009 the price of No. 12 jumped from $14 to $24. Of course some areas move through product more slowly than others, so there were instances where individual stores were selling No. 12 at a lower price than No. 8 for a short period of time.

Looking back and considering that the distillery didn’t produce a drop of whiskey for four and a half years, it’s pretty amazing that the No. 8 was only unavailable for a little over a year and the No. 12 was never completely unavailable. Obviously there was a great deal of liberty taken with the age range of the whiskey that went into these bottlings. Even though these are both no-age-statement bottlings, distillery personal will occasionally mention the age ranges used, and while I wouldn’t trust such statements absolutely, they can be insightful.

I dug up a newspaper article from September of 2003 where Dickel’s master distiller David Backus is quoted as saying that the No. 12 on store shelves is actually 12 years old, and they would prefer it to be about half of that age (I interpret that as 7 years old).

In an interview in the 4th quarter 2006 issue of Malt Advocate, Dickel’s new master distiller John Lunn state that generally Barrel Select is 11 to 12 years old, No. 12 is 10 to 12 years old, and No. 8 is 8 to 10 years old. The most recent info I could find came from a combination of Dickel’s website and a few fairly reliable blogs. They put the Barrel Select at 10 to 12 years, the No. 12 at 6 to 8 years, and the No. 8 at 4 to 6 years.

My first experience with George Dickel was a bottle of No. 12 that I believe I bought some time in 2008. I still have the empty bottle, and according to its code, it was bottled in mid 2007. The whiskey was pretty phenomenal, and I do remember only paying $14 for it.

The bottle of No. 8 that I’m tasting for this post was bottled late in 2008 and the No. 12 that I’m tasting was bottled some time in 2013.

George Dickel No. 8
The nose is full but soft, with mellow corn, complex oak notes, a hint of vanilla sweetness and subtle clay-like earthiness.
On the palate there’s some sweetness up front which is soon overshadowed by a soot-driven smoke and mineral quality. As that mellows, it becomes more vanilla-centric.
The finish sees a nice progression of dry oak and warming spice notes.
Overall it has good complexity but comes across as being a little youthful, though not to the point of being disjointed.

George Dickel No. 12
The nose is similar to the No. 8, though more restrained (surprising given the difference in proof). There is also more of a funky oaky/minerality quality.
On the palate it seems promising up front, but a bitter, astringent mineral-driven character quickly comes to the fore.
This mellows slightly on the finish revealing some dry oak, but it’s pretty one-dimensional overall.


While I didn’t expect this bottle of No. 12 to impress me as much as the one from 2007 (that surely had much older whiskey in it), I was surprised to find the No. 8 so much more to my liking. Many people describe the signature George Dickel character as tasting like Flintstone’s Vitamins. I think this is what I’ve been describing as minerality. While present in the No. 8, it wasn’t to the point of being off-putting. Unfortunately, that seems to be the driving force in flavor profile of the No. 12.

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