November 5, 2024 • 16 mins
How more than a century of one family's bootstrap ingenuity and shrewd marketing built the iconic Pappy Van Winkle brand.
In 2022, at Sotheby's in New York, Pappy Van Winkle's 23-Year-Old Family Reserve went for a jaw dropping $52,500 blowing past pre-sale projections and far beyond anyone's expectations.
In this episode, we'll cover: the story behind the rise of Pappy Van Winkle, from its humble beginnings to its reimagining in the 1980s. Pappy's brand promise which has informed four generations of bourbon making. And the steps Pappy's grandson, Julian Van Winkle III, took to position his premium aged wheated bourbon for success.
This is AudioPost Episode 9: Whip-smart marketing behind the world's most iconic bourbon, Pappy Van Winkle.
Full text edition here: https://loyelmedia.com/pappy-van-winkle-worlds-most-sought-after-bourbon-brand/
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Auctioneer (00:03):
Going once, going twice, it is history now.
Narrator (00:10):
In 2022, Pappy Van Winkle's 23 year old family
reserve went for a jaw dropping$52,500 at Sotheby's in New
York, exceeding presaleprojections and going far beyond
anyone's expectations. It's hardto dispute the public's
enthusiasm for the Pappy familybrand. And the story behind it
(00:34):
is a marketing masterclass withextraordinary insights that can
apply to any business. Welcometo AudioPost from Loyel Media,
where we talk about using thepower of media to market your
business. Coming up, how morethan a century of one family's
(00:56):
bootstrap ingenuity and shrewdmarketing built the iconic Pappy
Van Winkle brand.
In the late 1800's, just out ofcollege, Julian Van Winkle,
later known as Pappy, traveledKentucky by horse and buggy,
(01:19):
selling liquor for Louisvillewholesalers, W.L. Weller and
Sons. He was a star salesmanwith enough success to band
together with a coworker and buyup the operation not long after
W. L. Weller passed away. Evenbefore this, the 2 salesmen were
sourcing whiskey on the side atAPH Stitzel, a local distillery.
(01:40):
In time, Pappy and his partnerwould purchase Stitzel too and
merge the whole seller anddistillery.
Newsreel Announcer (01:47):
It's Kentucky Derby Day, and we're at
Churchill Downs in Louisvillewith a record crowd...
Narrator (01:52):
Stitzel Weller Distillery opened on Derby Day
in 1935, and Pappy ran it untilthe year before he died in 1965.
It would become the most famousdistillery in the world and
produce what is considered byconnoisseurs to be the finest
bourbon ever made. Bourbon is adistinctly American product.
(02:15):
About 95% of it is made inKentucky. As a matter of fact,
there are more barrels ofbourbon than people in Kentucky.
But to be classified as bourbonamong other things, at least 51%
of a whiskey's mash bill orrecipe must come from corn. The
maker has the liberty to choosethe other 49%. And rye was
(02:37):
traditionally added as thesecond grain. Then malted barley
to round it off. But rye wasn'tnative to Kentucky.
Little of it was grown in thestate. Distillers would ship it
in from the Midwest. Todistinguish his spirit, Pappy
chose native Kentucky wheat ashis secondary grain, making his
(02:59):
bourbon a bit smoother andsweeter, more complex. He
introduced this wheated bourbonto the masses and established a
product unique to Kentucky. Thebrew was around, but Pappy was
the first to bring it to marketon a grand scale.
Pappy set a high bar. Hiscommitment to excellence and
(03:22):
uncompromising productionstandards have informed 4
generations of Van WinkleBourbon Making. His image is the
hallmark of the Pappy Van Winklebrand today. And his promise is
honored and celebrated still forits honesty and simplicity. We
make fine bourbon at a profit ifwe can, at a loss if we must,
(03:47):
but always fine bourbon.
According to Pappy'sgranddaughter, Sally
VanCampbell, making fine bourbonwas his bottom line. And he
believed that if he made itright, everything else would
take care of itself. Oddlyenough, it would be 30 years
after his death before the firstbottle of bourbon that bore the
(04:10):
name Pappy hit shelves. StitzelWeller Distillery produced
800,000 cases a year of bourbonduring its heyday in the 19
fifties sixties. But by theseventies, vodka and rum were
becoming increasingly popular.
A new generation wasn'tinterested in drinking what
(04:31):
their parents drank. Ultimately,cheap bourbon flooded the
market, forcing the sale of thefamily distillery. Fortunately,
Pappy's son, Julian Van Winklejunior, who ran the business
after Pappy's death, had theforesight to retain the rights
to procure old stocks from thedistillery and keep the Van
(04:52):
Winkle brand name as a conditionof the sale. This would be key
to the brand's success in yearsto come. By the time Julian Van
Winkle the 3rd, Pappy'sgrandson, inherited the business
from his father in 1981, it waslittle more than a small
distribution company.
(05:13):
Still, Julian, now 3rd in lineat the reins, saw untapped
opportunity. Hardly anyone wasselling aged bourbon, let alone
premium aged wheated bourbon. Itwas a gap in the market he could
not only fill but dominate. Thisbold venture would allow Julian
(05:34):
to not only reenvision the brandbut also uphold Pappy's promise
to never compromise on quality.Julian the 3rd was 32 with a
wife and 4 young children whenhe took over the family
business.
Building a business around agedbourbon would mean a substantial
(05:55):
investment of time and money foreven a shot at big dividends
further down the road. He wasn'tsure if he could pull it off or
not, but it was the only thinghe knew how to do. So he kept at
it. Julian started buying up oldinventory of his family's
bourbon from strugglingdistilleries and other brands
(06:15):
that had been sitting in barrelsfor years. He launched the Pappy
Van Winkle label, featuring hisgrandfather Pappy's now iconic
image, and began releasing hispremium bourbon.
Looking back, he says, whatreally kept him going was that
he knew he was selling a greatproduct. He just had to convince
(06:38):
whiskey consumers of that too.In 1994, Julian released the
world's first 20 year oldbourbon. Soon enough, he would
have the proof that trusting hisgut was the right call. Julian
remembers exactly when the Pappybrand took off.
(07:00):
It was in Chicago when his 20year old Pappy was awarded an
unprecedented 99 out of 100rating at the Beverage Testing
Institutes World SpiritsChampionship, the highest rating
for whiskey ever given by theinstitute. After that, according
to Julian, the phone startedringing off the hook, and he was
short, didn't have nearly enoughof it. It wouldn't be long
(07:25):
before Pappy Van Winkle wouldbecome not only the world's most
sought after bourbon, but alsoits most sought after spirit,
returning bourbon to itsprominence. The papy distilling
and aging today will be ready todrink in 15, 20, or 23 years.
(07:45):
Low production and high demandmake Pappy extremely hard to
find.
In keeping with Pappy'sconviction to always bottle less
than you can sell, Julian onlyreleases stock once a year. By
limiting supply, demandincreases
and the brand takes on an air ofexclusivity.
(08:09):
Julian says this can be an idealstrategy for small businesses
facing off big competitors,making the point that companies
often get into trouble when theytry to grow too fast. If they
make a great product and keepproduction low, they'll never
get stuck with big inventorieswhen the economy turns tough.
That's been the downfall of alot of bourbon producers, he
(08:31):
says. They just make too much ofit. It loses all of its cache
and it's not as special.
Pappy knew where his product fitin the marketplace and had no
interest in competing withlesser brands. He produced a top
shelf bourbon steeped intradition, the finest expression
of indulgence and craftsmanship.And like his grandfather, Julian
(08:56):
stuck to the high end market.According to bourbon historian
Michael Veach, Julian had theadvantage of purchasing only
what he thought was good whiskeyand passing on barrels below his
standards. This commitmentdidn't come without sacrifice.
Putting away bourbon for so manyyears was hard on the family. It
cost a lot of money, and asJulian says, it's just sitting
(09:18):
there for 10 to 23 years, soit's an expensive deal. The
time, craft, and resources thatgo into producing a product at
this level make it rare,allowing Pappy Van Winkle to
command a premium in themarketplace. Aged bourbon is
pricey for a lot of reasons.Years pass before it's ready to
(09:41):
drink.
Nearly a quarter of the bourbonevaporates while aging. And
barrels are stored in rickhouses for years. Then, year
over year property taxes areimposed on each barrel. So the
rub is if a barrel bourbon hasbeen aging for a decade, the
owner pays the barrel tax 10times. But Kentucky is gradually
(10:04):
phasing out the bourbon barreltax with plans to eliminate it
altogether by 2043.
When he was starting out, Julianran a small operation on a
shoestring budget. He rolled uphis sleeves and pounded the
pavement to get the word outabout his whiskey. Julian would
(10:24):
use what were back thenunconventional methods to
promote his brew. He couldn'tafford to advertise, so he got
creative. He orchestratedbourbon tastings, hosted whiskey
paired dinners and placed PappyVan Winkle in high end
restaurants, where his 23 yearold Pappy would sell for $50 a
(10:45):
glass.
And at the urging of acolleague, Julian went so far as
to pull together a Van Winkletype study at trade shows and
events with wingback chairs,oriental rugs, bookshelves, and
Pappy's grand image hangingabove a make believe fireplace,
all to attract potentialdistributors. His Pappy was
(11:05):
showing up on the radar withimpeccable timing. Just down the
road, the Internet would breakinto the mainstream. And by the
mid 2000s, social media wouldskyrocket. Both online and off,
a surge of word-of-mouth buzzaround the Pappy brand would
help build customer loyalty andboost revenue to levels never
(11:26):
seen before in the industry.
It took a lot of sweat, a bit ofluck, and unquestionable
resilience to shepherd thefamily business through hard
times for the next generation.But through all the setbacks and
adversity, Julian has come outon the other side with a
(11:48):
thriving heritage brand thatenjoys worldwide name
recognition. In his bookPappyland, award winning
journalist Wright Thompson says,Julian and his wife, Cissy, have
been working closely with their4 children to create a solid
succession plan. In 2001,Julian's son, Preston, joined
(12:09):
him to help run the business.And in 2013, his triplet
daughters launched Pappy andCompany, a bourbon inspired
lifestyle brand.
The Van Winkle's have all beenfocused on the pivotal next
steps for both the dry goodsbusiness and the whiskey
business. It's not easy, Juliansays, but we're learning how to
(12:32):
do it right. If you'd like tolearn more about how to make
your marketing more powerful,check out episode 8, expert tips
from the Golden Age ofAdvertising, when ad industry
giants ushered in the creativerevolution. Thanks for listening
(12:56):
to audio post from Loyel Media.You'll find additional resources
with practical tips and usefulinsights about leveraging the
power of media to market yourbusiness at loyelmedia.com.
Going once, going twice, it is history now.
Narrator (00:10):
In 2022, Pappy Van Winkle's 23 year old family
reserve went for a jaw dropping$52,500 at Sotheby's in New
York, exceeding presaleprojections and going far beyond
anyone's expectations. It's hardto dispute the public's
enthusiasm for the Pappy familybrand. And the story behind it
(00:34):
is a marketing masterclass withextraordinary insights that can
apply to any business. Welcometo AudioPost from Loyel Media,
where we talk about using thepower of media to market your
business. Coming up, how morethan a century of one family's
(00:56):
bootstrap ingenuity and shrewdmarketing built the iconic Pappy
Van Winkle brand.
In the late 1800's, just out ofcollege, Julian Van Winkle,
later known as Pappy, traveledKentucky by horse and buggy,
(01:19):
selling liquor for Louisvillewholesalers, W.L. Weller and
Sons. He was a star salesmanwith enough success to band
together with a coworker and buyup the operation not long after
W. L. Weller passed away. Evenbefore this, the 2 salesmen were
sourcing whiskey on the side atAPH Stitzel, a local distillery.
(01:40):
In time, Pappy and his partnerwould purchase Stitzel too and
merge the whole seller anddistillery.
Newsreel Announcer (01:47):
It's Kentucky Derby Day, and we're at
Churchill Downs in Louisvillewith a record crowd...
Narrator (01:52):
Stitzel Weller Distillery opened on Derby Day
in 1935, and Pappy ran it untilthe year before he died in 1965.
It would become the most famousdistillery in the world and
produce what is considered byconnoisseurs to be the finest
bourbon ever made. Bourbon is adistinctly American product.
(02:15):
About 95% of it is made inKentucky. As a matter of fact,
there are more barrels ofbourbon than people in Kentucky.
But to be classified as bourbonamong other things, at least 51%
of a whiskey's mash bill orrecipe must come from corn. The
maker has the liberty to choosethe other 49%. And rye was
(02:37):
traditionally added as thesecond grain. Then malted barley
to round it off. But rye wasn'tnative to Kentucky.
Little of it was grown in thestate. Distillers would ship it
in from the Midwest. Todistinguish his spirit, Pappy
chose native Kentucky wheat ashis secondary grain, making his
(02:59):
bourbon a bit smoother andsweeter, more complex. He
introduced this wheated bourbonto the masses and established a
product unique to Kentucky. Thebrew was around, but Pappy was
the first to bring it to marketon a grand scale.
Pappy set a high bar. Hiscommitment to excellence and
(03:22):
uncompromising productionstandards have informed 4
generations of Van WinkleBourbon Making. His image is the
hallmark of the Pappy Van Winklebrand today. And his promise is
honored and celebrated still forits honesty and simplicity. We
make fine bourbon at a profit ifwe can, at a loss if we must,
(03:47):
but always fine bourbon.
According to Pappy'sgranddaughter, Sally
VanCampbell, making fine bourbonwas his bottom line. And he
believed that if he made itright, everything else would
take care of itself. Oddlyenough, it would be 30 years
after his death before the firstbottle of bourbon that bore the
(04:10):
name Pappy hit shelves. StitzelWeller Distillery produced
800,000 cases a year of bourbonduring its heyday in the 19
fifties sixties. But by theseventies, vodka and rum were
becoming increasingly popular.
A new generation wasn'tinterested in drinking what
(04:31):
their parents drank. Ultimately,cheap bourbon flooded the
market, forcing the sale of thefamily distillery. Fortunately,
Pappy's son, Julian Van Winklejunior, who ran the business
after Pappy's death, had theforesight to retain the rights
to procure old stocks from thedistillery and keep the Van
(04:52):
Winkle brand name as a conditionof the sale. This would be key
to the brand's success in yearsto come. By the time Julian Van
Winkle the 3rd, Pappy'sgrandson, inherited the business
from his father in 1981, it waslittle more than a small
distribution company.
(05:13):
Still, Julian, now 3rd in lineat the reins, saw untapped
opportunity. Hardly anyone wasselling aged bourbon, let alone
premium aged wheated bourbon. Itwas a gap in the market he could
not only fill but dominate. Thisbold venture would allow Julian
(05:34):
to not only reenvision the brandbut also uphold Pappy's promise
to never compromise on quality.Julian the 3rd was 32 with a
wife and 4 young children whenhe took over the family
business.
Building a business around agedbourbon would mean a substantial
(05:55):
investment of time and money foreven a shot at big dividends
further down the road. He wasn'tsure if he could pull it off or
not, but it was the only thinghe knew how to do. So he kept at
it. Julian started buying up oldinventory of his family's
bourbon from strugglingdistilleries and other brands
(06:15):
that had been sitting in barrelsfor years. He launched the Pappy
Van Winkle label, featuring hisgrandfather Pappy's now iconic
image, and began releasing hispremium bourbon.
Looking back, he says, whatreally kept him going was that
he knew he was selling a greatproduct. He just had to convince
(06:38):
whiskey consumers of that too.In 1994, Julian released the
world's first 20 year oldbourbon. Soon enough, he would
have the proof that trusting hisgut was the right call. Julian
remembers exactly when the Pappybrand took off.
(07:00):
It was in Chicago when his 20year old Pappy was awarded an
unprecedented 99 out of 100rating at the Beverage Testing
Institutes World SpiritsChampionship, the highest rating
for whiskey ever given by theinstitute. After that, according
to Julian, the phone startedringing off the hook, and he was
short, didn't have nearly enoughof it. It wouldn't be long
(07:25):
before Pappy Van Winkle wouldbecome not only the world's most
sought after bourbon, but alsoits most sought after spirit,
returning bourbon to itsprominence. The papy distilling
and aging today will be ready todrink in 15, 20, or 23 years.
(07:45):
Low production and high demandmake Pappy extremely hard to
find.
In keeping with Pappy'sconviction to always bottle less
than you can sell, Julian onlyreleases stock once a year. By
limiting supply, demandincreases
and the brand takes on an air ofexclusivity.
(08:09):
Julian says this can be an idealstrategy for small businesses
facing off big competitors,making the point that companies
often get into trouble when theytry to grow too fast. If they
make a great product and keepproduction low, they'll never
get stuck with big inventorieswhen the economy turns tough.
That's been the downfall of alot of bourbon producers, he
(08:31):
says. They just make too much ofit. It loses all of its cache
and it's not as special.
Pappy knew where his product fitin the marketplace and had no
interest in competing withlesser brands. He produced a top
shelf bourbon steeped intradition, the finest expression
of indulgence and craftsmanship.And like his grandfather, Julian
(08:56):
stuck to the high end market.According to bourbon historian
Michael Veach, Julian had theadvantage of purchasing only
what he thought was good whiskeyand passing on barrels below his
standards. This commitmentdidn't come without sacrifice.
Putting away bourbon for so manyyears was hard on the family. It
cost a lot of money, and asJulian says, it's just sitting
(09:18):
there for 10 to 23 years, soit's an expensive deal. The
time, craft, and resources thatgo into producing a product at
this level make it rare,allowing Pappy Van Winkle to
command a premium in themarketplace. Aged bourbon is
pricey for a lot of reasons.Years pass before it's ready to
(09:41):
drink.
Nearly a quarter of the bourbonevaporates while aging. And
barrels are stored in rickhouses for years. Then, year
over year property taxes areimposed on each barrel. So the
rub is if a barrel bourbon hasbeen aging for a decade, the
owner pays the barrel tax 10times. But Kentucky is gradually
(10:04):
phasing out the bourbon barreltax with plans to eliminate it
altogether by 2043.
When he was starting out, Julianran a small operation on a
shoestring budget. He rolled uphis sleeves and pounded the
pavement to get the word outabout his whiskey. Julian would
(10:24):
use what were back thenunconventional methods to
promote his brew. He couldn'tafford to advertise, so he got
creative. He orchestratedbourbon tastings, hosted whiskey
paired dinners and placed PappyVan Winkle in high end
restaurants, where his 23 yearold Pappy would sell for $50 a
(10:45):
glass.
And at the urging of acolleague, Julian went so far as
to pull together a Van Winkletype study at trade shows and
events with wingback chairs,oriental rugs, bookshelves, and
Pappy's grand image hangingabove a make believe fireplace,
all to attract potentialdistributors. His Pappy was
(11:05):
showing up on the radar withimpeccable timing. Just down the
road, the Internet would breakinto the mainstream. And by the
mid 2000s, social media wouldskyrocket. Both online and off,
a surge of word-of-mouth buzzaround the Pappy brand would
help build customer loyalty andboost revenue to levels never
(11:26):
seen before in the industry.
It took a lot of sweat, a bit ofluck, and unquestionable
resilience to shepherd thefamily business through hard
times for the next generation.But through all the setbacks and
adversity, Julian has come outon the other side with a
(11:48):
thriving heritage brand thatenjoys worldwide name
recognition. In his bookPappyland, award winning
journalist Wright Thompson says,Julian and his wife, Cissy, have
been working closely with their4 children to create a solid
succession plan. In 2001,Julian's son, Preston, joined
(12:09):
him to help run the business.And in 2013, his triplet
daughters launched Pappy andCompany, a bourbon inspired
lifestyle brand.
The Van Winkle's have all beenfocused on the pivotal next
steps for both the dry goodsbusiness and the whiskey
business. It's not easy, Juliansays, but we're learning how to
(12:32):
do it right. If you'd like tolearn more about how to make
your marketing more powerful,check out episode 8, expert tips
from the Golden Age ofAdvertising, when ad industry
giants ushered in the creativerevolution. Thanks for listening
(12:56):
to audio post from Loyel Media.You'll find additional resources
with practical tips and usefulinsights about leveraging the
power of media to market yourbusiness at loyelmedia.com.
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