Realist, not conformist analysis of the latest financial, business and political news

Capitalism Making Things Cheap

From our Swindon Correspondent:

From the FT

A Silicon Valley-based start-up is taking on the $500bn global spirits industry with proprietary technology it claims can reproduce the taste of a barrel-aged whisky, rum or brandy in three to five days.

Bespoken Spirits, founded by materials scientist Martin Janousek and entrepreneur Stu Aaron, has won awards in blind tastings with drinks made by exposing alcohol to “micro staves” of different woods under pressure, in what they likened to a “Nespresso machine on an industrial scale”.

I’m not quite sure how whisky is made, but I am familiar with Cognac. You take the grape juice, distill to produce what is known as eau-de-vie and then put it in barrels. Over time, the wood adds some flavours and smooths things out. Much like whisky, the longer you leave it the better.
It sounds like what they’re doing is some way of applying pressure to this, so accelerating the process. More of whatever is good about wood touching distilled malt happens quicker.
Bespoken’s launch met with a frosty response from the Scotch Whisky Association, which said many markets required maturation in casks for a spirit to be sold as “whisky”, including the UK and EU, where it must be aged for three years.

“Those quality definitions of whisky protect the reputation of whisky as a traditionally aged product, and other spirits produced with other techniques should be labelled in a way which doesn’t take unfair advantage of that reputation,” it said.

“The SWA will take action all over the world to stop the sale of products which seek to compete with Scotch Whisky as ‘whisky’ but fail to meet the legal requirements of the country of sale.” 

And there’s the luddites. But instead of smashing up stocking frames, they want to stop everyone getting hold of cheap, industrial whisky by using the force of government.
Of course, what will happen is that they won’t call it whisky but everyone will know it’s whisky in a short time, If they can produce a product that tastes like whisky and gets you hammered like whisky, it’ll get called whisky by people.

If they can just do Cognac next, because I’d like to drink stuff as good as Hine XO for a fraction of the price, thanks.

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HJ777
HJ777
6 months ago

Not sure you’re right here, Tim. The issue is not whether they can sell their new product, but how they describe it. Consumers have a clear understanding of what Whisky is and how it is made. If you can produce something better or cheaper or both, you should, of course, have every right to do so, but what you should not be able to do is to use a long established product name to sell what would be a different, or differently-produced product, contrary to what consumers would be expecting. All they have to do is to come up with… Read more »

Spike
Spike
6 months ago
Reply to  HJ777

Yeah, and all the Uber driver should have to do, in order to ply the city’s streets, is buy a taxi medallion (license) as I had to.

No, Sir, in fact whisky produced by a better or cheaper process that meets the consumer’s expectations is whisky, no matter how it threatens your franchise. It would be nice to force disclosure (not sure it’s on the label) that the new stuff had not actually aged 3 years, but established purveyors don’t own the dictionary.

HJ777
HJ777
6 months ago
Reply to  Spike

Not the same thing at all. I didn’t advocate restricting the supply of whisky to artificially inflate the price as is the case with taxi licenses. Under your proposal, who is to decide whether it meets the consumer’s expectations of whisky? Is this to be done before it is offered for sale and, if so, by whom? If after, how would you know that it met consumers’ expectations of whisky? They might think it worth buying simply on the grounds of price even if it didn’t meet their expectation of whisky. By your argument, why couldn’t grain Vodka (with a… Read more »

jgh
jgh
6 months ago
Reply to  Spike

But Uber taxi drivers don’t ply the streets, they’re private hire not hackneys, a completely different class of taxi.
Yes, they need a license – but a private hire license, not a hackney license.

Barks
Barks
6 months ago

If the “traditionally aged” product is superior (for the money) it will keep the upstart out without resorting to the courts. MD20/20 has not driven fine wine, or even plonk, out of the market.

Chester Draws
Chester Draws
6 months ago
Reply to  Barks

Sure bad wine isn’t driving out good, but modern wine production of good wine is driving traditional out. To watch a French person’s head spin ask how putting oak chips into a stainless steel wine vat is different from putting wine into an oak vat. Other than being quicker, cheaper and more reliable, that is. The chip method has everything going for it except tradition — you sure can’t taste the difference. As people discover that non-traditional wines are better value for money, the market for the traditional ones continues to shrink. The exception will only be things like Champagne… Read more »

Spike
Spike
6 months ago

Tim should have quibbled with the headline: It’s not capitalism doing this, though an entrepreneur facilitated it, but the free market (and the question raised by the column is whether the market will remain free).

Schlitz discovered that adding sugar could accelerate the brewing of beer so you didn’t have product stuck in vats for whole weeks. There were no guilds to insist that the product wasn’t beer, but the “flash-brewing” process was met with ridicule.

Leo Savantt
Leo Savantt
6 months ago

It’s the tannins that give the pleasant taste to many an alcoholic beverage (also to tea); alcohol is quite disgusting to the palette, hence the multiple varieties that are produced, all in an effort to disguise the taste.

Esteban
Esteban
6 months ago

Might be the oldest trick in the book – if a competitor comes up with a better product get the State to limit its distribution or at least change its name to protect your market share. Of course, you’re only doing it to protect consumers, just because they think the new stuff tastes just as good doesn’t mean they should be allowed to buy it.

Michael van der Riet
Michael van der Riet
6 months ago

I remember the first time I was in Edinburgh and I went to a pub to see genuine Scots at work. Being a whisky snob at the time, I was alarmed to find that the most common order was whisky and lemonade. Point being, what’s the difference. All that some people want is a alcoholic mixer with a tolerable kick to the palate. Ditto whiskey. Within living memory Wild Turkey was the cheapest crap on the market and now it’s an expensive cult drink. My concern would be the amount of antifreeze which as Tim has often explained is why… Read more »

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