Increasingly, I'm hearing that the choke point in terms of producing more American whiskey is warehouses. Even a few years ago, there was excess warehouse capacity. Today there is virtually none, and Turkey, Beam and Maker's have been steadily building new ones. A new warehouse, depending on the size, costs about a million dollars.
You can't start up a distillery unless you have someplace to start putting full barrels on day one. Right now, that's what everybody is up against, including people who have plenty of reserve still capacity.
Some people in the industry are actually nervous that too much new capacity is being added, especially when it's by people who don't have their own brands to fill and will be selling a lot of it in bulk. There's going to be a sudden, significant increase in supply in five or six years. Will there be enough pent up demand? Or will there be a short term (they hope) glut?