Made in Holland but not Drunk in Holland
A bottled history of Dutch distilling
The French distill cognac because of the taste; the Russians distill vodka to get drunk. The Dutch, however, will distill anything alcoholic as long as they can turn a profit. In the last 50 years, as the home consumer got too rich and snooty to drink hard liquor, Dutch distillers turned their attention overseas. Their winning strategies could be a marketing case-study.
The Dutch liquor industry started back in the Middle Ages… but not because producers wanted to create a great-tasting product. The first Dutch distillers refined stale beer into malt wine so they could recoup lost excise taxes. Typical for a country that has always taken pride in its thriftiness. The distillates, often enriched with herbs, were mainly used for medicinal purposes and gained wide popularity as several plague epidemics swept over the country. Around 1600, juniper-berry-flavored spirits called jenever became a favorite among innkeepers and their guests.
At first, only small quantities of jenever were shipped abroad. Belgians and Germans shared the Dutch liking for it, but produced their own supply. The French, Spanish and Portuguese had their wine-based distillates. England imported some, but preferred cognac and brandy.
Hooray for religious strife
This all changed in 1689, when the Protestant couple, William III of Orange and Mary Stuart, ascended the British throne. They levied huge import duties on spirits from Catholic countries, making jenever relatively cheap and hence hugely popular with poor Englishmen. Distillers, cask- makers and liquor-traders all made fortunes. During this export-fueled jenever boom, some of the best-known Dutch liquor families entered the business, including Nolet and De Kuyper. But England soon started producing its own jenever – by then called gin. The next hundred years or so would be lacklustre for the Dutch liquor industry.
Luckily for Bols, Nolet, De Kuyper and their peers, jenever gained new traction in the 19th century. The advent of local alternatives to barley, including sugar beet, corn, potatoes and Jerusalem artichokes, made alcohol distillation much cheaper. By the second half of the nineteenth century, jenever was so cheap that it became the most popular alcoholic drink, surpassing beer. Domestic consumption, including that by women and babies, soared to 9.5 litres per capita per year. Even though the Dutch government regularly raised excise taxes on hard liquor, which slightly curbed sales, jenever managed to remain the leading drink in The Netherlands well into the twentieth century. Dutch distillers thrived.
But after World War II, drinking preferences shifted. The middle class – and women in particular – discovered sherry and wine. Young people chose beer over jenever, which started to be seen as a blue-collared old man’s drink. And, thanks to rising incomes in the sixties, drinkers who wanted something more potent could now afford foreign luxuries like whisky and cognac. Dutch liquor producers tried to capture their share of the luxury market by introducing imitation cognac – called vieux – made from grain alcohol and artificial flavors. But they still saw their business steadily declining and had to devise a new strategy.
When the going gets tough, the tough get going… abroad
Once again, just like in the seventeenth century, Dutch distillers they looked outward. Exports could make up for lower domestic sales. They had a slight problem, though. Because of its rather harsh taste, jenever didn’t go down very well outside its native land. The solution: produce something else that foreigners would appreciate.
The Nolet family has been by far the most successful. In the eighties, Carel Nolet sr. and Carel Nolet jr., the tenth and eleventh generation of the centuries-old jenever producing clan, zeroed in on the United States, where vodka was and still is the most popular spirit. In Holland, hardly anyone drank vodka at the time, but the Nolets set out to create a Dutch vodka. To lend it an aura of authenticity, they christened it Ketel One, after Ketel 1, their premium jenever brand.
Instead of introducing the new product with fanfare and advertisement, they devised a very low-key stealth marketing strategy. The Nolets visited the renowned BIX Restaurant in San Francisco, and let the owner taste their concoction. He liked it, bought a case of Ketel One, and started recommending the drink to customers and fellow restaurant owners. More tasting sessions throughout the country followed, and Dutch vodka conquered America one restaurant and bar at a time. Ketel One became something of a cult hit and, because the Nolets refused to sell their product to anyone they hadn’t met, many bar and restaurant owners begged them to pay a visit to their venue.
By 1996, Nolet sold 100,000 cases of Ketel One Vodka containing twelve bottles each. In 2003, sales surged to well over a million cases and Ketel One had become the third imported vodka brand in the United States.
In 2008, beverage behemoth Diageo (Smirnoff, Baileys, Guinness) made the Nolet family an offer they couldn’t refuse. The company would pay $900 million to become the world’s exclusive distributor of Ketel One Vodka. The Nolets would keep ownership of the brand name and retain the eternal right to distill the vodka in their South-Holland hometown of Schiedam. By then, production of Ketel One had reached almost two million cases, and vodka accounted for 95 percent of their sales. Diageo now aggressively markets Ketel One in over fifty countries and considers the brand to be one of its key assets.
Products unknown at home
Other Dutch distillers have thrived because of exports. All have one thing in common: the drinks they ship overseas are very different from the ones they produce for their home market. Herman Jansen, which in Holland is known for Sonnema Beerenburg, a jägermeister-like concoction, has entered the US market with Sonnema VodkaHerb, a herb-infused vodka totally different from its native original. De Kuyper and Bols did well by focusing on liqueurs. De Kuyper made a big hit in 1984 with Peachtree peach schnapps, which inspired the ‘fuzzy navel’ cocktail. Two years later, the De Kuyper family sold to Jim Beam the right to manufacture and market all its products in the USA for $86 million. Back home, no one had even heard of Peachtree. Over three-quarters of De Kuyper’s turnover is now generated outside Holland.
Around the same time, Bols became the worldwide market leader in liqueurs for mixing. Any bar patron recognizes the brightly coloured bottles that are a favorite of cocktail makers around the world, from Albania to Zimbabwe. Exports now make up 70% of sales. Even Hooghoudt, a family-owned distillery based in the northernmost reaches of Groningen, which nurtures its rural image, has started producing a chic vodka for export named Royalty. Of the 25.7 million litres of pure alcohol produced by Dutch distillers last year, only 10.7 million litres disappeared down Dutch throats. The rest, nearly 60%, was shipped abroad.
And jenever? Though it still is the most widely consumed hard liquor in Holland, its consumption is rapidly declining. In 2001, the Dutch drank about 23 million litres of the stuff, but in just one decade consumption has almost halved to a meagre 13.5 million litres. Bols tried to revive interest in jenever in the US in 2008 by introducing an ultra-premium brand called Genever, primarily geared toward women. Who knows? It might work. After all, forty years ago in the West, vodka wasn’t considered a smart and stylish spirit, but an acetone-like plonk that only a Russian alcoholic would imbibe. It might take some clever product placement in a James Bond movie, though, before sophisticated bar-hoppers in New York and Hong Kong start to order a jenever straight-up.
The term Dutch courage originated in the Eighty Years’ War, when English soldiers fighting against Spanish troops in the Low Countries discovered jenever’s calming effect before battle.
Royal De Kuyper
Owners: De Kuyper family
Brands: De Kuyper liqueurs, Peachtree, Mandarine Napoléon
Owners: Nolet family
Brands: Ketel 1 jenever, Ketel One Vodka
Owners: AAC Capital Partners
Big brands: Bols liqueurs, Bokma jenever, Pisang Ambon
Owners: Jansen family
Brands: Sonnema, Joseph Guy cognac, Notaris jenever
Owners: Hooghoudt family
Big brands: Hooghoudt jenever, Royalty vodka, El Picu