Advice from Female Ground Breakers: Fawn Weaver and Marianne Eaves

When you think of whiskey leaders, innovators, founders, distillers and most importantly: Captains of Industry- your mind tends to conjure up a towering gritty old intimidating man. Well, that’s changing.

By now everyone knows who Fawn Weaver is; Historian, Best Selling Author, and founder of Uncle Nearest. The Tennessee whiskey that carries a story with every glass poured. On the other side of Tennessee is a little state known for making a bit of whiskey as well-Kentucky; and that is where Marianne Eaves comes into the picture. The first ever female master distiller hailing from the state. Separate, but together- the duo has kicked down the door, ushering in a new generation of much needed perspective. I sat down with each of these women to get some insight into our business and more importantly-women in leadership. What I got was some great life lessons, not just for us industry folk, but everyone who dares to lead.

The full interviews are available at TheBackOfTheHouse.com/blog, here are some key take-aways:

Sonny & Fawn: SN: Your background as a minority Entrepreneur, Bestselling Author (The Happy Wives Club), Chief Historian, Owner of Uncle Nearest, the list goes on and on; How do you balance all of this out?

FW: To the outside world, it seems that I am always going; I’m actually just very efficient at what I do, and I make sure to take 24 hours off every week for the last 20 years.

SN: Are you chasing adrenaline or more success, what is your endgame? FW: I don’t see it as chasing, I am just living my truth. Endgame, my endgame is that this company is growing, and I would be disappointed if in four generations from now; this company wasn’t still growing with someone who looked a lot like me.

SN: Touching on "Multi Cultural" positions:

FW: I absolutely hate that we have isolated a set of people and essentially denied them access to the breathe of the full portfolio, so I would like to blow those departments up.

SN: A lot of people doing the hard work, at the end of the day aren’t in the board room at the end of the day, and that is a disservice in my opinion.

FW: There is a distinction between keeping people out and just surrounding yourself with people that one is used to seeing and comfortable with. That’s something that is being worked on over time.

FW On Planning and Preparation: Never thought of it, every aspect of my life has been purpose driven. The opportunities that I have, have been all purpose drive results done organically, presented to me because I am living for purpose.

SN: That brings us back to what we touched on earlier, if you do things for the right reasons; organically-opportunities will present themselves?

FW: Absolutely, for a lot of people, they put limitations on themselves and limit themselves by what they perceive what’s going to happen to them. I don’t see hurdles, I just go over, under and around as needed to get what’s needed to get done, no excuses.

SN: So, self-perpetuation manifestation is something you absolutely believe in? If you think there are barriers and obstacles, you are leaving yourself room for excuses.

SN: What is your target demo that you attribute your 9th qt triple digits gains, throughout the pandemic? FW: I think it’s the exact opposite, we don’t have a target audience. People think because of our story and ownership, we target just African Americans; we make up 14% of the population-what sense would that make. When I was first pitching and targeting distributors; a funny thing I would do is; whomever I would end up speaking with would inevitably ask me that questions. I would just look back at them and reflect whatever they are back to them, because that is what our company is made up of and that is who we really target…everybody.

SN: How is the Nearest & Jack Advancement going?

FW: Amazing, my phone lights up daily and I am helping others who are trying to make something special in their own respect.

SN: So you are helping where you can.. FW: Yes, for instance, I was a keynote speaker at Goldman Sachs last week, as I was asked to advise on how they could help, and what I told them was simple. These days, the difference isn’t money, it’s the business plan. The way they could help was to not just reject someone because of their business plan but reach back out and advise them of what was lacking form their plan. You have to remember, generally, the gap between getting financed and not is the knowledge of what types of business plans get accepted; most people of color are first generation money; people of non-color have been putting together solid busines plans forever, we have not.

SN: I must ask this, will the Uncle Nearest brand spin off, sell, or become a sector of another company?

FW: It won’t happen, why would I build the first major African American spirits brand, just to sell it?

SN: The reason I ask; I have seen a million times- brands get built up, thrown against the wall for a short-term money opportunity; the brands integrity and equity are lost at the same time, and I don’t think anyone wants to see that.

SN: What type of advice would you give a female or minority who wants to move up in their company with ideas

FW: The same advice I would give to anyone; leapfrog and present your ideas. If you are waiting for someone to give you your dues, you are going be waiting a long time.

SN: What is your favorite Whisk(e)y outside of Uncle Nearest?

FW: Dickel Bottle in Bond and Henry Mckenna10 year.

SN: Any insights into line extensions?

FW: We don’t do line extensions, but we do have a brand we have in R&D.

Sonny and Marianne Eaves:

SN: When I think of Marianne, I think marrying art and science. How do they balance themselves out?

Marianne: I always considered myself a creative person, but in engineering school beat the creativity out of me. Brown Foreman allowed me to be creative and let me experience the liquid and process that is so unique. I get to combine my strengths, art, and science: The ability to marry art in science. My Chemical engineering background meeting a world filled with pallet driven, taste profiles with subtle nuances that come together beautifully. SN: Authenticity: Consumer perspective and ability to spot the real thing is at an all-time high, and the ability for a master distiller to be authentic goes hand in hand with that.

Marianne: Something that helped me stand out in the industry, was that I was fresh into the industry and that forced me to have a fresh perspective and come up with new ways to develop processes.

SN: This article will be getting out to tens of thousands of female and minority folks in the industry- A majority of the spirits world is male driven and are extremely large scale businesses, often trading publicly.

Statistically-females are more likely to land a management position, but 90% them will be kept at mid-level positions. What advice would you give them in the face of the good ol boys club?

Marianne: At the beginning of my career I was a true introvert, there was a woman named Nancy Warfield at Brown Foreman, that really pushed me to get out of my comfort zone, in order to experience things and been seen. Start somewhere similar into the sector you want to eventually be in. Make sure your work ethic is known and shown. Follow your passion and take every opportunity that is thrown your way, and make sure you raise your hand for opportunity. Do not let anyone, regardless of gender sway you from what you want to get done with your goal.

SN: Brown Foreman, Castle and Key Project, the first female master distillery in Kentucky, Sweetens Cove-All on your terms and your timeline, I have a feeling you like a challenge and you don’t mind being out on a tight rope.

Marianne: I don’t want to be somewhere too long with someone else driving the bus. Being a bit fearless is a part of who I am as well. Looking at Castle and Key when it was a pile of rubble with broken windows, to building the entire distillery up and laying down amazing products was a way to make my path myself. You must trust yourself to take the next step that’s right for you.

SN: I can agree with you on that. I have been in situations where I have been doing well, trusting your own abilities are crucial to putting yourself on a tightrope with no net when transitioning into something new.

SN: What do you think of the grass roots success story of Fawn Weaver and Uncle Nearest (Tennessee) , I feel like you helped pave a wave for bold females to step up and dominate..

Marianne: I think it’s absolutely incredible, I worked at Brown Foreman, so I knew the story. Fawn is definitely the woman to lead that incredible story. For some folks it may have been uncomfortable at first, but it does not matter, they are delivering the right message and they are going to do amazing.

SN: Future Projects? Lots of exciting stuff, I tease it on Social sometimes. I am consulting and hoping for a way to build my own brand. I will be building the first ever Chinese whiskey soon, which is exciting. I am taking steps towards my vision. I have a mobile laboratory with my RV and a mobile distillery; something will pop, and I will wait for the right opportunity.

SN: I put out an article about the industry leaning towards luxury in the future, where do you see the industry going?

Marianne: I agree with that wholeheartedly, the industry is definitely leaning that way, and super premium luxury will continue to grow.

You see that with products like Sweetens Cove selling out in three minutes.

If you have the patience to lay down the proper product, you can have something special.

SN: Absolutely, there is a rush to jump on the craft whiskey train, but you must have the right juice, and time. You must lay it down and wait for it to be ready, and hope the market is where you need it to be when its eventually ready, because you will not be able to switch up the label and age and trick savvy consumers these days.

SN: Last question- what is your favorite whisky?

Marianne: I will forever be a fan of #Woodford double oak. When I was in R&D at Brown Foreman, I had an opportunity

to see if go from start to finish and it has a lot of the caramel and sweet notes and everything that makes a great bourbon.

Full Interviews Can be found here:

https://youtu.be/uisWlmOiLP8

https://youtu.be/GwjGI3V4K9U

How To Read A Tax Stamp

Taxing alcohol has got to be the easiest way for any smart government to raise tax revenue. There are of course tales of the cat-and-mouse games of the smuggler and the revenue collector, not just in Scotch whisky history, but anywhere in the world that alcohol is subject to taxes. When restrictions on whisky distilling were relaxed in the UK following the Excise Act of 1823, the exciseman, or ‘guager’, became the nemesis of the illicit distiller, as well as becoming a permanent fixture in the legal distilleries of the 19th century. Indeed, at one time, an office full of revenue collectors was necessary at the larger distilleries to ensure the correct taxes were levied.

Over time different jurisdictions have tried to simplify the process by developing their own stamps to show that the correct tax has been paid on a bottle of spirits. For modern collectors and enthusiasts these tax stamps and tax strips can offer additional clues to not only dating a bottle, but also tracing its provenance.

What is a tax strip? A tax strip, or duty stamp, is a label affixed to a bottle of alcohol to show that the relevant customs duties and excise taxes have been paid to the government. Tax strips are created to be difficult to counterfeit and, like cash, often feature fine details and complex designs to deter forgers. They are usually applied by the producer or the importer of the goods. Some tax strips are applied over the closure and double as a tamper-proof seal.

UK

The small pink circle can be part of the label design, or it can be attached as a sticker to bottles of spirits. These are used on bottles of alcohol that are intended for the UK market, are higher than 30% ABV, and are packaged in bottles of 35cl or more.

Spirits that are to be exported, or sold on ships or aircraft, or are intended for the use of diplomats don’t need stamps.

The UK tax stamp has been in use since 2006. Prior to this, there was no indication on a bottle whether appropriate taxes had been paid.

Pre 2006 bottles may have a stamp added retrospectively if the bottle has passed trough a UK retailer or bonded warehouse.

Italy

Italian tax strips and medals have been in use at least since the 1930s.

Scotch whisky has an enduring popularity in Italy and many of the veteran bottles we receive for auction are adorned with various Italian tax decorations.

Between 1933 and the end of the 1950s, it was common for Italian bottles to have a small metal medallion. These were either attached by string or form part of the closure. With Italian bottles from this era, particularly liqueurs, the duty medallion often forms part of the seal, which prevents bottles from being refilled and resealed.

The colourful paper tax strips were not introduced until the mid-1950s and have changed over the years. This gives auctioneers an indication of when the bottle was imported to Italy. Caution though, you should be wary of using Italian tax strips to date a bottle. Importers would order tax strips by the thousand and continue using them until they ran out, and when the design changed, the importer was allowed to use up their remaining strips before ordering the new tax strip design. So it is not uncommon to see a tax strip from the 1960s on a bottle which would have been filled in the 1980s, for example.

Spain

Duty labels have been in use in Spain since the end of the 19th century, and over the years have included a bewildering array of strips and stamps of varying colours, shapes and sizes.

As well as tracking the increasing price of excise duty over the decades, tax strips can offer insights into changing social landscapes of the time. For instance Spanish tax strips from the Franco era feature the ‘coat of arms of the eagle’, this was removed once he fell from power.

Canada

Canadian tax strips were applied to ‘bottled in bond’ spirits and are not technically revenue stamps. Anyhow, until 1994, the strips provided a key piece of information which is the date a spirits was made.

The year stated is the year in which the youngest whisky in the bottle was distilled. The bottling year can usually be assumed to be between three and ten years later unless an age is stated.

Canada’s tax strips became bilingual (English and French) in 1974.

USA

Tax strips were introduced on US bottles following the Bottled in Bond Act of 1897, which sought to standardise the quality of spirits (mostly whiskey) being sold domestically.

The green strips carried the name of the producer as well as the ‘Made’ and ‘Bottled’ dates, and assured the consumer that the whiskey was distilled in a single season by a single distiller, that it had been matured for at least four years, and that it was bottled at 100 Proof.

For export bottles blue strips were used and there was no requirement for bottling at 100 Proof.

Following the repeal of Prohibition in 1933, Federal tax strips were introduced. These red strips were seen on bourbon and other American spirits until the Tax Reform Act of 1984 ended their usage. The US tax strips had become so reassuring to drinkers that after 1984 some brands introduced their own paper seals over the caps of their bottles.

In addition to the paper tax strips, some bottles have small, colourful, postage stamp-sized decals, these are State stamps with the State Treasurer’s signature and sometimes carry a bottling date.

Credit: © Whisky.Auction Blog - Source: https://blog.whisky.auction/how-to/how-to-read-a-tax-stamp/

The Category Unaffected by Covid-19

Throughout the COVID-19 epidemic, it is pretty clear that on-premise business plummeted and customers have become more frugal with their purchases, however, the interesting take-away is that spirit brands retailing at $100+ have grown at double digits and continue to grow faster than the total spirits market. The current estimated value of the Ultra Luxury/Status spirits market is $8.3 billion, with a compound annual growth rate of 7% (2014-2018), far outpacing the total global spirits market growth at 2% CAGR.

For example, data shows that between 2008 and 2012 (post-recession), global prestige-plus spirits (generally $100+) grew 82% in volume, and almost 230% in value, which reinforces the resilience of high-end spirits after economic challenges. The 230% increase in value in a category that is thought to already have the highest value to customers, pre- and post-recession should really give a glance into how isolated and bullet-proof this category really is.

However, there is a different side to the story in how suppliers keep these brands intact. In 2008, after the market crash, the global luxury market lost 9 percent of its value according to Bain & Co., but inevitably it bounced back. The brands that did not survive attempted to re-brand and lower price segments or just sold off.

Lowering your price segment exposes your true market price, while permanently jettisoning established clientele from ever trusting or buying your brands again.

Additionally, if you do not have a firm grasp and understanding with your partner wholesalers, they are likely to adopt an aggressive commercial and discount policy, that could be detrimental to the brand equity you have established. Moving brands out of the exclusivity range, takes them out of the luxury tier, however, staying concurrent with price strategy equals stagnant sales; creating a catch 22 between the wholesaler and the supplier. This, at least in the mid-term, could hurt the positioning of brands that do not have contingency model or funds in place to float through turbulent times.

There is a significant distinction between affordable luxury, super luxury, and status brands. Luxury and Super-Luxury brands have thrived pre-covid in waves under the premiumization trend. However, the Status branded customer base is rarely affected to the point of diminished sales during a recession.

The reason is wrapped around the simple distinction between being rich and being wealthy.

Building a status level brand comes in phases. You cannot simply price the brand into a category, or even pay for sponsorship's/branding to gain entrance into this category. You must pass through the Luxury tier, then into the Super-Luxury and finally break into Status tier.

These tiers act as a gateway from one to another, in order to help establish your brand and weed out the brands that do not belong. Customers who are purchasing $100 to $200 brands three years ago will have progressed into purchasing $500 brands today, and ultimately entering the status brand criteria for the latter half of their financial phase. Smart and tactical suppliers such as Pernod-Ricard, Diageo and LVMH have mastered how to capture the entire life cycle of a customer and walk them through the process, as they progress through financial capabilities and have learned how to balance their books to stay the course in turbulent times.

Categories can be broken into the following classifications: “affordable luxury,” encompassing spirits in the $100 to $1,000 range, and “ultra-prestige/Status,” counting bottles that price upwards of $1,000. The most value sits in the $100-$250 bracket, the IWSR reports, though the $250 to $1,000 segment is expected to see quick growth on the horizon. Brands such as The Macallan, Glenfarclas, The Balvenie, Laphroaig, Dalmore, Glenlivet, and others have generated several hundred million dollars in revenue for their limited-edition collections and annual releases.

Nevertheless, can status brands flourish in the changing e-commerce environment? Yes, here are just a couple sites that are growing by leaps and bounds in the Super Luxury/Status brand segment: La Maison du Whisky, Whisky auctioneer, Number One Drinks, Le Close, Whisky Exchange and Bounty Hunter. These sites, including Master of Malt, an online spirits retailer with broad selection of high-end whiskeys, saw sales soar 200% over the last week of March and continue through the Covid-19 epidemic.

Top tier companies, such as Beam Suntory and Bacardi that are not 100% luxury houses, generally have branches of their respective books being nurtured towards the status sprit category. These brands are on the cusp of breaking through to the elite category but could easily find themselves ill equipped with the core competencies and patience to nurture these high-potential brands through such turbulent times. Adversely, they might be willing to take reduction of the brand status or put them back in the market for acquisition. Brands that were once forbiddingly expensive to some, could become viable in the post-crisis period; or the right company that is a true Lux house could snap them up and add to their extensive portfolio, shaping a new mega luxury conglomerate with the right company and patience

Suggested Plan of Action: Analyze current trends and create predictive modeling with real time indicators to be bench-marked in phases throughout fall and winter of 2020, rolling into 21’.

1. Allocate a greater portion of investment to the online channel. Explore new ways of partnering with recognized and established e-retailers. Step up your personalization efforts in digital marketing. Luxury consumers are accustomed to a high standard of service in stores; the emphasis, then, should be on creating a personalized digital experience of the same quality.

2. Develop a plan for dealing with unprecedented levels of unsold 2020 inventory, without resorting to steep discounts, which again jeopardize brand equity, and puts your established current clients on an island.

3. Tailor local experiences with targeted marketing, strengthening digital offerings, and engaging more deeply with consumers, as client base is not as wide a casted net as the regular wine and spirits customer base.

4. Use the crisis time to act as a catalyst for developing and executing an online and omnichannel strategy. Compared with this time a year ago, (during the seven-week COVID-impacted period ending at April 18th), brick-and-mortar alcohol dollar sales were up 21%, while online sales of alcohol have skyrocketed to over 2X that of a year ago, up 234%. The alcohol industry has been the fastest growing e-commerce department among all consumer-packaged goods (CPG), and weekly growth has continued, with status spirit buyers keeping concurrent with prior sales, if not increasing.

5. Finally, stay the course and do not deviate from category. Spending and consumer habits reflect well for the status spirit category, as projections in the next decade expect the gap between the canned wines of the world and the $200+ bottles to get wider and wider; resulting in the status spirit category growing, while avoiding saturation or incremental competitors. For more information, please feel free to email me at: snagra1@gmail.com Site: TheBackOfTheHouse.com/Blog

Sources: Rebalancing the ‘COVID-19 Effect’ on Alcohol Sales. (2020)., from https://www.nielsen.com/us/en/insights/article/2020/rebalancing-the-covid-19-effect-on-alcohol-sales/ Global beverage alcohol is not expected to rebound until 2024 – IWSR. (2020)., from https://www.theiwsr.com/global-beverage-alcohol-is-not-expected-to-rebound-until-2024/