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View Full Version : Is barreling bourbon becoming cheaper??



mbanu
07-22-2005, 03:34
What with port and sherry sales on the decline, and cognac reusing most of its new barrels within its own industry, it looks like bourbon is becoming the primary source for used barrels in the rum, scotch, tequila, canadian and irish whisky industries. I've even heard that some scotch manufacturers have been known to pay for the barrel production costs entirely in exchange for "seasoning their barrels" with bourbon before shipping them off. (Any truth to that?)

How do you folks think this will end up affecting the way bourbon is made? I'm hoping that as barrels become cheaper for the bourbon producers to manufacture and use (due to higher resale value and cost sharing deals cut with the other spirit manufacturers), they'll consider lowering their barreling proofs. I think that would probably do a decent bit to offset the dropping bottling proofs and the rising distillation proofs that have been affecting bourbon lately.

BourbonJoe
07-22-2005, 06:08
You may be right about the possibility of lower barrel proofs IF greed does not set in. The bean counters may have another idea. Look what happened to vintage port...you could buy a bottle for 8 bucks in the 70's. Now you must be either a doctor or lawyer to afford a bottle. I hope we try to keep bourbon on a lesser track and give the nod to quality over quantity and keep prices affordable.
Joe http://www.straightbourbon.com/forums/images/graemlins/usflag.gif

TNbourbon
07-22-2005, 08:55
...How do you folks think this will end up affecting the way bourbon is made? I'm hoping that as barrels become cheaper for the bourbon producers to manufacture and use (due to higher resale value and cost sharing deals cut with the other spirit manufacturers), they'll consider lowering their barreling proofs. I think that would probably do a decent bit to offset the dropping bottling proofs and the rising distillation proofs that have been affecting bourbon lately.



I don't think they WANT to lower the barreling proofs (I'm talking about the suits, not the distillers). The higher they can put in into the barrel, the higher it is at dumping, and the more water they need to add to get it to bottle proof. The more water they add, the more money they make.
And THAT'S what's driving barreling proofs up and bottle proofs down, not anything practical about the whiskey-making process.
It's about money. Much of distilling (http://www.straightbourbon.com/forums/images/graemlins/bowdown.gif to Heaven Hill and Buffalo Trace) has become corporatized.

Rughi
07-22-2005, 11:33
There seems to be a conundrum about barrel proof / length of aging.

Mike Veach, in particular, writes often about how younger whiskeys of 30 or 40 years ago got to a robust, mature character because of their lower barrel proof.

Could it be that:
high proof + long aging = mature
or
low proof + shorter aging = mature

It seems like not tying up the inventory for as long would have savings to at least partially offset the greater amount of water taking up space in the barrels.

Perhaps the real problem is that the market (i.e. us) puts an unnecessary value on the age stamp when the quality of what's inside is not yet a known factor.

The outcry of the most recent OFBB comes to mind of those who felt cheated by a younger whiskey. I can't recall seeing any tasting notes that spoke of it being immature, just not having the right number of years on the label - (but I haven't tasted it myself).

Roger

TMH
07-22-2005, 11:56
I don't think they WANT to lower the barreling proofs (I'm talking about the suits, not the distillers). The higher they can put in into the barrel, the higher it is at dumping, and the more water they need to add to get it to bottle proof. The more water they add, the more money they make.
And THAT'S what's driving barreling proofs up and bottle proofs down, not anything practical about the whiskey-making process.
It's about money. Much of distilling (http://www.straightbourbon.com/forums/images/graemlins/bowdown.gif to Heaven Hill and Buffalo Trace) has become corporatized.



It seems the general feeling on this board is that barrel proof is higher in order to increase profit, which seems like a reasonable possibility. I think a few other factors need to be looked at also, such as demand, warehousing/labor costs, and taxes.

If demand has increased since the 1970s then more barrels are needed to meet the demand, which requires more space for storage, more employees, and more taxes to be paid. You must look at the various costs per barrel.

It could be these costs are proportionally higher than in the past from factors like insurance, health benefits, IT, etc. This is complicated even further by the trend to barrel bourbons longer than before.

Correct me if I'm wrong, but don't consumers want older bourbon? When I speak of consumers I'm not just talking about U.S. consumers, after all it is a worldwide market. Wasn't the lower barrel proof bourbons of the past also aged less? Would bourbon consumers be willing to buy a younger lower barrel proof bourbon for the price of an aged higher proof cut bourbon? If given the choice between an EWSB 10 year and higher barrel proof EWSB 4 year, both at the same price, which would you buy?

It seems like a younger bourbon successfully marketed as a high mid shelf product could have a greater profit return for the distiller, which would make the suits happy. Less time on the rack means less labor costs, less tax, and a quicker turn around on each barrel. In fact couldn't barrels used by young bourbons be reused? If so this could save more money as well. If not, it would mean more barrels being sold to Scotch producers.

Perhaps a distiller like Buffalo Trace will try a lower barrel proof if we as a group demand and support it. Hmm...perhaps someone should start a poll.

Ken Weber
07-22-2005, 12:35
Interesting thread. A couple of points need to clarified.
1. I know of no bourbon producer who has scotch distillers supplying new barrels for seasoning. I do know that some highly esteemed Scotch producers have entered into contracts with us to supply specific barrels for their use however. As an FYI, we import Glenfarclas Scotch, which in my opinion is very good. John Grant does in fact supply barrels to a sherry producer for a 3 year period to season his barrels. The producer gets free barrels and John gets them seasoned to his liking.
2. At Buffalo Trace, we have been experimenting with different entry proofs to determine what is the best proof for a given brand over a given period of time. This is on-going and I will let you know in a couple more years. We currently have pulled samples yearly for the last 6 years. We will probably continue the experiment for another 15 years.
3. Used bourbon barrel sells are very erratic. Last year we sold barrels to WalMart for a couple a bucks each. When the scotch market is slow due to over production, demand goes down and so do prices. We may get $25 for choice barrels, but the majority go out considerably lower. A new barrel currently costs around $125. Bottom line, this is and always will be a money loosing proposition.
4. Please know that often times bourbons produced 20 - 30 years ago were more times than not, older than the age stated on the label. Weller Special Reserve is 7 years old, it is/was not unusual to use 10 - 12 year old bourbon. Bottom line, just because it went in at a lower proof may not explain why it seemed to taste better.

Ken

musher
07-22-2005, 19:36
Perhaps the real problem is that the market (i.e. us) puts an unnecessary value on the age stamp when the quality of what's inside is not yet a known factor.

The outcry of the most recent OFBB comes to mind of those who felt cheated by a younger whiskey. I can't recall seeing any tasting notes that spoke of it being immature, just not having the right number of years on the label - (but I haven't tasted it myself).

Roger


I seem to recall that the issue was the fact that they charged the same price for it as the previous years.

The understanding is that the product is taxed every year, which is a big part of the price, and evaporation loss (angel's share) increases over time, also raising the price. So the complaint was that we were being taken advantage of, since BF didn't have as much invested into last year's OFBB, but charged the same prices.