The Economics of Watering Down Maker’s Mark

Maker’s Mark announced in an email to distributors over the weekend that it’s going to be decreasing the alcohol content of its bourbon by 3 percent. … From 45 percent by volume to 42 percent by volume—but it’s still a substantial change. The reason is clear enough. Demand for bourbon is skyrocketing internationally, which is great for U.S. bourbon producers, but which also means they’re facing strained supplies. The obvious question is, why would it be better to water down your product rather than simply raising prices?

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