WEAKER JACK DANIEL'S BECOMES SPIRITS STRONGMAN

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What if you tampered with the makeup of a venerable spirits brand and virtually no one noticed?

That's precisely what happened to Jack Daniel's Tennessee whiskey. The brand's distiller, Brown-Forman, over the past two years has managed to reduce Jack Daniel's alcohol content-it's gone to 80 proof from 86 proof-and still pull off impressive sales gains.

True, it aroused the ire of a magazine called Modern Drunkard, and some 10,000 signatories to an online petition demanding the kick be put back in Jack Daniel's. "It's an outrage," said Frank Rich, editor of the publication, blasting the move a "Zima-fication" of an American icon. Yet the Zima nation has spoken: Since the 80 proof formula reached full national distribution last year, Jack Daniel's sales have grown at double the rate of the overall spirits industry.

How did Brown-Forman pull it off? First, the change was all but imperceptible except to connoisseurs with exceptional palates. Moreover, in making the shift, the company kept in mind that its brand core-its imagery, reputation, heritage and packaging-went far beyond the actual liquid.

NO NEW COKE

"They've been able to manage to [avoid the] New Coke problem," said Allen Adamson, managing director at WPP Group's Landor Associates, which works with Jack Daniel's rival Diageo. "They've been able to pull it off because of the strength of the brand." He added it would have been "far riskier" for Jack Daniel's to have changed its logo or packaging or any visual element.

There's no denying Jack Daniels is a powerful brand. Nearly a decade ago, in 1996, it surpassed Jim Beam bourbon as the country's best-selling American whiskey. Sales shot up by 7.4% in 2004-compared to 3.5% for the overall industry-to 4.2 million cases, according to Impact Databank. That's 50% higher than Jim Beam, marketed by Fortune Brands' Jim Beam Brands.

passing johnnie

Worldwide, Jack Daniel's last year surpassed Diageo's Johnnie Walker Red Scotch whisky to become the world's best-selling whiskey. The No. 4 global spirits brand, it sold 7.6 million cases worldwide, up 8.4%.

This isn't the first time Jack Daniel's got diluted. In the late 1980s Brown-Forman lowered the proof to 86 from 90 after a boost in excise taxes. Mike Keyes, global general manager at Jack Daniel's, said sales trends in 80-proof markets were stronger than where it was 86 proof.

Believing Jack Daniel's would sell better at a lower proof, Brown-Forman decided to bring it down. "We felt it would be a better place for Jack Daniels to be commercially," he said. While lowering the proof also saves Brown-Forman $6 million or more in excise taxes, that was a side benefit, not the driver, of the decision, Mr. Keyes said.

When the company introduced a lower-proof product in some states in February 2003 and completed the rollout in February 2004, it made no announcements. In fact, the move went under the radar until Modern Drunkard attracted media attention last fall.

Jim Beam took a shot at the move in a print ad for its 86-proof Jim Beam Black. "We'd never 86 our 86 proof" ran the copy in an ad from agency BBDO, Chicago, part of Omnicom Group. But it didn't make a sustained attack on the change. "I'm surprised they didn't want to make more of that," said an executive close to Jim Beam.

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