A warming tale of whiskey entrepreneurship

The last few years have been tough for the wider drinks and hospitality industry, with casualties across the board resulting from the pandemic (in all its forms) and the inflation crisis. What am I saying? Tough? Now that’s an understatement, if ever there was one. To be honest, I find it surprising that we even have an industry left after everything that’s happened.

But every now and again, amidst the heart-breaking stories of loss and bankruptcy, a tale to draw a smile from even the most stony-faced individual comes along. On this occasion, the story comes from San Diego, via Cambodia, and involves a refugee who at the age of one contracted polio and suffered paralysis in one leg.

In pursuit of the necessary healthcare, Steven Yeng was taken by his parents to Thailand where they stayed in a refugee camp for six years, waiting patiently in line every day in the hope of receiving some food and water. For days he would eat nothing but bananas – until one day a family from America came and sponsored the family, bringing them home with them to San Diego.

Steven and his wife Brittany, who met at elementary school, are now wealthy beyond their wildest dreams after selling a majority stake in their peanut butter-flavoured whiskey to Pernod Ricard, the world’s second biggest spirits and wine maker. Yuk, say some. Yum, say others. Whichever camp you’re in (and I’m firmly in the non-bargepole touching camp), the couple have done remarkably to create a business worth an estimated £300m to £400m when they’ve only been going since 2018.

So how did they come up with the idea? It started off when Steven started using peanut butter – which he had eaten lots of to get his strength up when he first came to America – to make cocktails at the bar he ran in San Diego. His wife, a chemist turned lawyer, then used her chemistry skills to stabilise peanut butter in whiskey, creating the first super-premium peanut butter-flavoured whiskey.

We don’t know exactly how much the Yengs made from the deal, or indeed the size of the stake they’ve sold, but they’re clearly emerging from this with a massive windfall and an ongoing ambassadorial role with Skrewball. And who’s to say they don’t deserve every penny given what Steven and his family have been through?

I won’t be drinking their whiskey, but am delighted at the good fortune they have enjoyed. It really is one of the most heart-warming stories of the past few years.

A long-term flavour phenomenon?

The timing of their exit may turn out to be perfect, depending on whether the flavoured whisk(e)y bonanza continues. Like any new idea or product that suddenly emerges and is successful, everyone else jumps on the bandwagon until suddenly the bubble bursts and the search for the NBT (next big thing) starts. We’ve seen it with alcopops, with cider served over ice and with gin, and flavoured whisky seems a prime candidate to join that list.

I’m probably being a bit previous, but I just get the feeling it’s not going to be a long-lasting phenomenon. Some sound quite nice, to be fair. Jameson Orange and the Jack Daniel’s trio of Honey, Fire and Apple all appeal. I wonder whether the Yengs’ peanut butter concoction will herald the development of ever more off-the-wall flavoured whiskies – how about Marmite?

Not that flavoured whiskies are actually new, anyway. Trevor Stirling and his analyst colleagues at Bernstein pointed out that the Drambuie brand (a blend of malt whisky, honey, herbs, and spices) was registered as a trademark in 1893 and is, according to legend (probably myth), based on a recipe of Bonny Prince Charlie’s handed down in 1746.

And in the modern era we have had American Honey, a blend of Wild Turkey bourbon and honey, which was launched in 1976. Initially it was only sold at the distillery itself and a limited number of other locations, but since 2006 it has been more widely available. It has now been left behind by Jack Daniel’s Honey, while Jim Beam Honey has made this a particularly crowded sub-sector.

One particular success has been Diageo’s Crown Royal Apple, followed by vanilla, salted caramel and peach variants, although honey and maple flavours have been retired. Such retirements have inevitably led to fears of oversupply of flavoured whiskies and concerns over the longevity of many as the core brand is cannibalised.

But perhaps the biggest fear is that a plethora of flavours can easily damage the core brand through dilution. According to Bernstein, negative reviews show that Brown-Forman is on the verge of diluting the core Jack Daniel’s brand equity and its analysts said they believed it should focus on relaunching Apple to the on-trade and not launch any new flavours.