JACK DANIELS: A SUCCESS STORY

[Music] and ordinarily when a corporation sets out to do a business case history on itself it's a pretty simple matter they just line up all their company's accomplishments and then brag on them for 15 or 20 minutes the idea of course is to impress us in the audience with how big and modern and progressive the company is they want us to say to ourselves boy howdy this is some big dynamic force in today's business community well now here a while back the jack daniel distillery got a request to do a case history on their whiskey and so because i've been doing some work for them over the years they just turned the project over to me my name is dave fulmer and i'm a freelance writer and i know that the best way to learn about something is to go direct to the source that's why we're down here in the distillery grounds at lynchburg in fact they even let me use mr jack's old office to to work out of oh well good morning gentlemen i see you're hard at it again this morning well the first thing i did was to borrow a bunch of company case history films here so i could study up on them and see how these other companies went about it and it didn't take me long to realize that while they all approached it from their own direction they all bragged about pretty much the same things they'd like to talk about their location well here i chalked up a little list for you i'll show you they like to brag about their location their manufacturing methods their packaging their pricing that's their marketing you know and their advertising these are the five keys to business success you might say so i thought well i'll just borrow those five points and i'll use them for my jack daniel success story and i did but you know i hadn't gone very far before i made what was for me a rather startling discovery and that is that those five points don't work for jack daniel no you take those those five points there and you stack them up against the way they do business here at jack daniel and then you compare that to what these modern progressive companies do you don't get a business success story you got a blueprint for instant disaster those aren't five reasons for jack daniels success what they really are is five reasons why jack daniel will never make it that's a fact let me show you what i mean because it's the damnedest thing you ever saw take this first point here location now your big progressive companies today place a lot of stock in this business of location they have whole real estate departments a lot of them full of high-powered experts whose whole job is just to study maps and graphs and demographic statistics and then scientifically select the perfect place for a manufacturing plant or a distribution center location very important now let me show you something this is a map of the state of tennessee and as much as i would like to point out to you the thriving manufacturing center of lynchburg on there i can't because i'm afraid it isn't there now this is goodies world atlas point printed i guess within the last 10 years or so and according to it the town of lynchburg which has been here i don't know 150 years at least doesn't exist now i submit you can walk into places in paris france or tokyo japan and you'll find jack daniel whiskey but you look on a map and try to find out where they've been making this world famous whiskey for well over a hundred years now you're just out of luck now that isn't true that isn't true of all maps no you you you look on a county map here moore county you'll find lynchburg on there all right providing you look closely enough but of course they have to put it on there because lynchburg is the county seat moore county tennessee smallest county in the state maybe the smallest in the whole country the natives will tell you you can put all the more county in your vest pocket and still have room for two toothpicks and an ingersoll watch and right in the middle is lynchburg population by the 1980 census so 660 some now if the courthouse ace mr jack daniel decided to make his whiskey of course now that was over a hundred years ago and you realize he didn't have any high-powered real estate experts to guide and counsel him in fact about all mr jack daniel had when he started making his whiskey here was two strikes against him the first was he was only 13 years old at the time the second strike was that his partner in that original whiskey venture was a lutheran preacher that's a fact fellow by the name of call reverend dan call well that partnership didn't last long though after a couple of years mr jack bought out the good reverend and went into business for himself that was in 18 and 66 and he was all of 16 years old at the time that was the year he registered with the federal government and jack daniels became the first and to this day the oldest registered distillery in the united states right here in the hollow at lynchburg tennessee but why lynchburg well maybe it was because it was close to transportation after all where you make your product isn't nearly as important as how quickly and easily you can get it to market right wrong moore county in all its history has never had a railroad and according to the natives it never will now they they claim it's because it might disturb the livestock but i suspect it goes deeper than that you talk to these people you get the idea that the railroads are to blame for all of our social problems herb fanning for instance you talk to him you he'll tell you that the population explosion can be blamed directly on the railroads when the trains come through town five o'clock in the morning and wake you up you don't have to get up and go to work until seven what else is it to do [Laughter] simplistic maybe but not without a certain logic oh and another bright note about moore county tennessee has what is known as local option over 70 years ago moore county voted itself dry to this day you cannot buy a bottle let alone a drink of whiskey in moore county i was talking to clarence roman yesterday now clarence has lived here all his life and worked for many years at the distillery and he has an opinion on just about everything so i asked clarence what he thought about moore being a dry county why dave it's politics politics politics they tell me saying a little politics in your graveyard every morning now you can't eat it well not now tell me something clarence because i'm curious why is it that jack daniel has stayed here in this little remote town of lynchburg why don't they move to the city where it's easier to get to what dave it's the water the water the water clear and i'll show you get you taste of it that's reading uncle jack put his distillery up here on the count of the water well what's so special about well this water stays 56 degrees a year around and it's 100 percent pure it's on free get your drink coffee yeah that's good water all right but damn it clearance there's there's good water in a lot of other places in this country too places that are a lot easier to get to than lynchburg now you mean to tell me that we can't take good water from any place in this country cool it down to 56 degrees remove the trace iron from it and then make jack daniel whiskey out of that well hell no daddy well why not well this water good enough for uncle jack it's good enough for us if it was good enough for uncle jack it's good enough for us i guess you just don't argue with progressive business-like attitudes like that speaking of progressive attitudes let's look at this point number two now manufacturing methods now please understand there is no great secret or mystery to making whiskey we know they were making it in ireland in the sixth century and i wouldn't be surprised if they were making it in egypt six centuries before that it's careful fussy work but anybody can learn to do it well hell back during prohibition there were 15 or 20 working stills within walking distance of lynchburg of course you had to know which way to walk and you had to know what to say when you got there but they were there whiskey making has always been a way of life in this part of the country and so by coupling this native ability with our technical knowledge wouldn't you think that making jack daniels whiskey would be just as slick simple as pie mechanized operation wouldn't you think that well i'm sorry not the way they do it in lynchburg now it's almost as though the industrial revolution never reached moore county they keep right on making their jack daniel whiskey by the same old-fashioned outdated costly time-consuming methods that were originated by mr jack daniel himself way back in the 1860s they select their grain and test it by hand they cut hard maple and stack it into ricks by hand they reduce those ricks to charcoal through controlled outdoor burning by hand everybody from the head whiskey taster to the lynchburg ladies who come in to put the neck labels on the bottles does his job by hand ask them why they simply tell you oh hell they wear no hurry and talk about impractical listen this extra blessing they call it this charcoal mellowing they give every drop of their whiskey it's done in the same laborious way it was done when mr jack daniel set up the process the result is it costs them over twice as much and takes them over three times as long to make their whiskey before it's even ready to go to the barrel for aging well i'll tell you i don't believe you're going to catch any other whiskey makers going to all that time and trouble and expense dripping their whiskey through room high vats of hard maple charcoal like that no sir of course now on the other hand you're not going to find many whiskey makers with a finished product like jack daniels either because what that slow troublesome old-fashioned charcoal mellowing process does is give jack daniels a a mellowness and a taste that's different from any other whiskey jack daniels is a unique product and that's no fooling the treasury department's alcohol tax bureau ran a series of tests on jack daniels way back in the 1940s and here's what they had to say the whiskey has neither the characteristics of bourbon or rye whiskey but rather is a distinctive product which may be labeled simply whiskey well as business people you know how valuable it is to have a product of superior quality with a character all its own genuine product differences are hard to come by these days as any advertising copywriter will tell you but these days business success isn't necessarily measured by product superiority alone no it's it's measured by growth and more and more growth seems to be synonymous with diversification throughout industry everybody is hedging his bet growing through diversification expanding through proliferation everybody except jack daniel that is no here in the hollow the only business they are in is the whiskey business period and from what i can tell that's exactly where they'll stay just plodding along in the footsteps of their founder like a stubborn old mule with blinders on making their whiskey the best they can every day they make it no matter what well all right now let's look at number three for a minute packaging i read an interesting article here recently about packaging and package design it had a section in here on naming your product and it advocates using a name of three orphan in here on the psychology of response to different colors and these color experts claim that by changing from one shade of salmon pink to another on the lettering in front of a kind of a piece background they were really able to goose the sales curve of a leading underarm spray deodorant well that's what they claim but it was really an education this article it really impresses on the reader the vital importance of those three provocative persuaders the package the label and the name all right now let's see how we stack up here man's got to be a scuba diver or a tuba player to get through in one breath as far as color registration is concerned well i guess was henry ford wasn't it said give them any color they want as long as it's black package design let me point out that the only difference between this bottle of today and this old bottle i used to fill by hand back in the 1890s is that the old bottle had a cork stopper in it while the zingy new model has got a screw cap aside from that this is the exact same shaped bottle as the one that people poured a drink from to celebrate the election of grover cleveland the shape is distinctive though i think the most distinctive thing about it is that it has never changed while all around it companies are changing and updating their packages the old jack daniel square bottle just goes on and on of course along with everybody else they made the switch to metric sizes here a while back now they sell their whiskey by the leader or they used to sell it by the court but that is all all right what about pricing now shall we look at that for a moment you know the biggest word in retail today is discount it comes in three styles you have your discount you have your super discount and over here you have your true discount now whatever the hell that is you know i honestly believe that a person could go through life entirely at this point in history without paying full risk retail for anything except of course for jack daniels and that's kind of curious when you think about it because from the very beginning their whole sales philosophy has been simply to get people to try their distinctive whiskey to sample it for themselves and then use their own judgment well you'd think wouldn't you that the easiest way to get more people to try your product would be to make it easier for more people to buy your product just by giving them a price break from time to time wouldn't you think that well like everything else you can forget it now as long about the turn of the century when mr lim matlow he was jack daniel's favorite nephew he inherited the distillery here from his uncle mr lam matlow started putting a slogan on all the jugs and bottles that went out of the hollow all goods worth price charged and that's still their attitude today the result is jack daniel does not discount no they have an established case price to their wholesaler which they do not reduce rather than relying on the artificial stimulation of sporadic and short-term price reductions jack daniels would far rather build their franchise on consumer demand a demand based on quality of product and consistency of image and effort all goods worth price charged call it doing things the hard way if you want to but that's the way they operate well i'll tell you i don't know of any other whiskey maker that operates that way no jack daniel is the maverick the sore thumb of the whole bunch and nothing demonstrates that point more clearly than their approach to point number five jack daniel with them you get a portion of a page maybe once in a great while in a small magazine you'll get a full page but you get a black and white picture usually of some lynchburg native just a distillery worker doing his job while all these other ads take you out for a big night on the town jack daniel just sits you down on the front parlor sofa and shows you some snapshots from the family album and as for a picture of the product well they just kind of stick it down there at the bottom like an afterthought and it's in black and white too of course with a label like that what good is color gonna do you no headlines no tricky phrases no puns or plays on words just gentle friendly conversation another thing about these ads i've met a lot of these folks in these pictures they are real lynchburg people since the beginning of their national advertising jack daniel has never used a professional model well there you have it the five reasons why in my estimation jack daniels should never make it in today's big modern dynamic world but of course as you and i both realize jack daniel is making it they are they show no signs of capsizing under the pressures of the overwhelming majority now they're just sailing along an armada of one bucking the tides and currents of modern accepted industry practices and making headway impressive headway why well there are probably a lot of reasons but there are three that come immediately to my mind and i just like to sketch them in here for a moment with you the first through the years jack daniels has successfully increased its distilling and aging capacity while resisting any change in technology or timing that would in any way alter the finished product jack daniels has maintained its package its label and the integrity of its projected public image of being just what it is an historic distillery with an old-fashioned dedication to quality all goods worth price charged and out of those first two has grown the third it's the almost unbelievably strong consumer loyalty and consumer demand which the whiskey enjoys so while it's pretty easy for someone like me to stand up here and say that jack daniel breaks every rule in the book the fact is that jack daniel had set a successful pattern for making and selling his whiskey long before the book was ever written and they're not about to change that pattern either no you ask them they'll tell you if it was good enough for uncle jack it's good enough for us well all i can say is it was lucky for them that mr jack daniel started making whiskey when he did because that's the only business i know of where you can keep going and growing for over a hundred years without updating or modernizing or improving your product like this i mean for instance suppose mr jack daniel had gone into the film business way back then and started making motion pictures let me show you the kind of movies he'd still be trying to make today [Music] [Applause] you