By K.B. Gould
on 1.17.14

JIM-BEAM-SUNTORY-STYLE-GEAR-PATROL-LEAD-


In 1923, a pharmaceutical representative named Shinjiro Torii built a distillery in Yamazaki with the dream of creating a Japanese whisky for the Japanese people — despite the conventional wisdom that nothing could compete with traditional distillers in Scotland and Ireland. His original distillery evolved into Suntory, a holding company that recently made a $13.62 billion cash play for Beam, Inc., makers of Jim Beam brand spirits, Old Crow, and Maker’s Mark, among others. If it goes through, Suntory will become the third largest whiskey company by volume in the world.

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Many balk at the idea that a Japanese company might own Jim Beam. This is Jim Beam we’re talking about here. Jim Beam! The most iconic of American brands, owned by foreigners! If that upsets you, well, sorry. It’s probably going to happen. But even if Suntory buys Beam, Inc., there’s no reason that the brand can’t keep it’s American identity. In fact, it has to — by law, bourbon must be made in America.

If you still can’t sleep at night, it might help to know that Louisville mayor Greg Fischer is championing the deal: “They’ve [Suntory] indicated there will be no threat to local jobs,” he said. “As a matter of fact, Beam is growing quite a bit, especially the bourbon segment.”

One case study for a spirits brand that’s done a phenomenal job of keeping its identity in the face of a foreign takeover is Hudson Whiskey. In 2010, Scottish-owned William Grant & Sons — which owns Glenfidditch, Balvenie and Sailor Jerry, among others — acquired the Hudson brand from Tuthilltown Spirits. Since their acquisition, nothing on the front end of Hudson Whiskey has changed. Correction — it’s now available in many, many more places than ever before, but that’s hardly a negative. If you visit Gardiner, New York on a Saturday, convivial co-owner Ralph Erenzo still gives the tours. His son, Gable, serves as the brand’s ambassador. For all intents and purposes, Hudson Whiskey still acts as an all-American, family-owned brand.

If Suntory’s acquisition of Jim Beam upsets you, well, sorry. It’s probably going to happen.

Now, one could take the position that the Beam, Inc. acquisition is different in scale than the Hudson Whiskey buyout — Hudson’s small size allowed them to keep their identity, one could say, but Jim Beam is monstrous, and as a non-premium drink there’s a decent argument that corners could be cut in quality. However, we’re talking about a buyout by the Suntory — a company that took home nine gold medals at last year’s International Spirits Challenge, the World’s Best Blended Whisky Prize at the World Whiskies Awards 2013, and The Tasting Panel Magazine Distillery of the Year award at the San Francisco World Spirits Competition. When we spoke to Suntory Brand Ambassador West Neyah White about what differentiates Suntory from other distillers, he cited numerous examples when the company prioritized their product over expense, including their massive development budget. During one 10-year legacy experiment, Suntory shipped water from their Yamazaki distillery to Scotland, and vice versa, to see the effects of water and environment on a whiskey’s character.*

Suntory knows how to make whisky, and they know how to make it well. In fact, one could even argue that — gasp — they make a better product than many brands owned by Beam, Inc. Take a look, for instance, at the fan favorite Maker’s Mark. Last year fans were so angered by an announcement that Maker’s would be watered down from 45 percent ABV to 42 percent ABV that the decision was reversed; the specter of the potential transgression still hangs over the brand. In its 90 years of family ownership, Suntory and its subsidiaries have enjoyed nothing short of a stellar reputation.

If the shareholders agree to the deal, Suntory will let the larger brands under the Beam, Inc. umbrella keep their heritages and maintain their trajectories while helping to distribute and promote them in new markets. In the coming months, expect to see absolutely nothing happen to your favorite brand. Unless you’re Nobutada Saji, chief executive of Suntory, or Bill Ackman, the biggest Beam shareholder, life post-acquisition will continue as usual.

CHEERS, JEERS? We’d love to hear from you. Email the author at kgould [at] gearpatrol.com and let him know what you think. Thanks for reading.

*As it turns out, all other things equal, Yamazaki water run through a Scottish still yields a product with Yamazaki characteristics, and vice versa; however, during the aging process, a whisky acquires the characteristics of its environment.

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