Bourbon Invasion

Our man looks at how Bourbon invaded Australia
By Chris Middleton
This is the story of how an American corn-based whisky overwhelmed Britain's most loyal Scotch market. Today, Bourbon is 60 per cent of all whisky drunk in Australia. On a per capita basis, Australians consume 2.5 times more than Americans. This Bourbon invasion can all be traced directly back to one bar in vibrant and sleazy Kings Cross; Sydney's sinful and exciting underbelly.

The Bourbon and Beefsteak opened in Kings Cross in September 1967, owned by a distinguished US soldier and ex-CIA operative Michael Hand and his American partner Bernie Houghton. They spotted the opportunity to open the first American-style bar and restaurant for US service personnel as Sydney became a major Vietnam R&R centre (rest and recreation). More than 300,000 young GIs came to the Cross to recuperate. The area pulsated with 24-hour entertainment for soldiers and Sydneysiders looking for a good time. The Bourbon & Beefsteak served more than Bourbon, beer and steak. Recreational services purchased from the premises above a sex show next door. vice and nightlife are what made the Cross desirable and famous.

Hand and Houghton were known as colourful identities, no more so when they had to flee Australia in 1980 for drug trafficking, the collapse of their merchant bank and murder allegations. The Bourbon & Beefsteak survived criminal investigations, wars, and various colourful local identities. Even though the Cross is more gentrified and the venue recently renovated and rebadged The Bourbon, it remains a popular local watering hole.

During the first half of the 19th Century, early proto-Bourbons developed in Kentucky and Tennessee. It was not until the early 20th Century that Bourbon obtained its first product standard regulations under the 1906 Pure Food & Drug Act. The 1909 Taft Decision codified the nomenclature for straight Bourbon whiskey. In 1821, Maysville, Kentucky, Western Citizen advertisement sold 'Bourbon whiskey', the first time the word Bourbon appeared. On America's east coast, drinkers knew this Ohio Valley whiskey as Western or Kentucky whiskey until the Civil War. By the 1840s, doctors John Amberley and James Crow formulated the standards and procedures for Bourbon production, from the mash bill to new charred oak. The first bottled Bourbon was A M Benniger's Old Bourbon sold to New Yorkers in 1849. 'Old' back then meant two or three years in wood or rectified to resemble in colour and flavouring an aged whiskey. After the Civil War, Bourbon replaced rye as America's most popular straight whiskey and would remain the leading straight whiskey style except briefly for two years, 1896 and 1902, when rye crept past. Bourbon competed with common whiskey, a rectified and heavily adulterated spirit that dominated whiskey sales until the early 20th Century. Until Prohibition, America had been the world's powerhouse for whiskey production, not until the 1950s was straight Bourbon able to rebound in sales. With only 13 per cent of whiskey sales in 1946, Bourbon began to erode blended American whiskey's supremacy by capturing 47 per cent share by 1958. The high water mark came in 1970, when domestic Bourbon sales peaked at 36 million cases, 40 per cent more than today.

By 1970, Bourbon was exporting 50 thousand cases to its three major export markets: Japan, Germany and Australia. The presence of US servicemen was the catalyst in each country for importing and the acclimatisation of Bourbon into the local communities.

Bourbon was not new to Australia. It made its appearance 120 years earlier as the Bourbon industry was becoming commercialised in Cincinnati and Louisville; 70 years later Prohibition slammed the industry gates shut. Bourbon first rode into Australia with the Californian 49ers; prospectors drawn to Australia's 1850s Gold Rush. Before refrigeration, at the height of summer in Ballarat, wealthy miners celebrated with chilled champagne and Bourbon cocktails mixed with ice cut from Walden Pond in Massachusetts. Bulk and bottled Bourbons built a national distribution with brands such as Pike's Magnolia Bourbon from Cincinnati and John Cutter's Louisville Bourbon. Drolly, one Brisbane drinker in 1867, recommended old Bourbon as an ideal rat bait. By 1883, the first transnational Bourbon brand was created, A P Hotaling's Kangaroo Rare Old Bourbon, rectified in Louisville, bottled in San Francisco and sold in Sydney. Bourbon struggled as Australia was Britain's leading export market for Scotch, along with some tenacious competition from Australia's malt whisky distilleries. Prohibition, then the Depression, followed by the Second World War, it negated the chance for the US whiskey industry having sufficient stock to entertain overseas sales. The opposite occurred, Australia was exporting whisky to America when Prohibition was repealed. On the outbreak of the Second World War, Australia restricted trade to protect its balance of payments mandating special import licences for non-Commonwealth countries. This prevented Bourbon's access until revoked in 1962. Fortuitously, this was about the same time Bourbon had built up sufficient reserves for export.

The 1960s were a time of significant social upheaval and Bourbon was an attainable American symbol of youthful rebelliousness and change. A change of order was afoot, and American culture and products were becoming the new sirens: jeans, motorbikes, rock and roll, fast food. Herein lies a major part of the reason why Bourbon began winning over converts. It had both sensory and psychological appeal amongst successive younger generations.

Bourbon's sweet, bold taste, rich vanilla and caramel flavours have broad sensory appeal. Bourbon caught the massive Coke wave. As drinkers passed from adolescence into adulthood, cola was the flavour bridge into Bourbon. More than 75 per cent of Bourbon is drunk with cola. It's Australia and America's favourite cocktail. Now the new cocktail generation and premiumisation are carrying Bourbon into new usages and habits.

The most influential factor is probably socialisation, the impact of America's popular culture with the modern Bourbon marketing. American music, movies, food, fashion, the desire for independence, modernity and individuality became new forms of self-actualisation. Bourbon was cool, very cool, with lots of attitude. Not the stuffy conformity and snobbish status of British whisky, trapped in a world of traditions, old tartan warriors, royalty and class conformity. This was Old World values versus New World values. This was a new and younger battleground that old Scotch brands were ill-equipped to fight. Jim Beam and Jack Daniel's advertising created highly appealing campaign imagery around rugged individualism and aspirational modern archetypes. The result, these two brands dominate Bourbon and Tennessee whiskey with 70 per cent of sales, including RTDs (Ready to Drink). More than 150 Bourbon brands and 400 expressions fight for the balance.

Bourbon's brand success and market development in Australia stand as a bellwether for other whisky markets. Where Britain once held more than 90 per cent whisky share, it took only two generations for Australians to fall under the spell of Kentucky and Tennessee's charcoal rectified whiskeys. Now a new micro-breed of US craft Bourbon brands has joined the fray, establishing their international beachhead in Australia, from Oola from the west coast, to Balcones and Michter's and Kings County growing on the east coast. The Bourbon invasion continues and production continues to increase.