"As the shortage improves, 101 Rye will be back, but probably not for 2012."
2 of those 3 clauses bother me and the other clause ("will be back") is not very comforting.
I'm having a hard time understanding "shortages." If they run a standard production schedule they should be producing a relative "set" amount (in gallons) of new make a year. Those barrels age and then the next round gets barreled, and so on, and so on.
Unless they stopped production altogether or decided to sell barrels to independent bottlers, there should be a reasonable amount that gets shipped each year.
Can any sage or guru shed some light on this enigma for me?
|-o-| [-o-] |-o-| "I'm on the leader"
They probably run rye less than one week a year. More than likely they only dump and bottle once a year, too. That's one aspect.
The other is this: if, following projections they laid down (for sake of argument) 100 barrels of rye in 2008, they could dump those and bottle in 2012. But what if, as they say, demand goes up 20% over the course 2009-2012? They can adjust production upward annually but they still are only going to have their 100 barrels ready to go 2012.
That's why everything they have is already bottled and shipped for the year.
Life's too short, and there's too much good whiskey within reach.
The answer is that demand has shot up very quickly by whiskey standards. To keep up with demand, they had to have anticipated this spike at least 4 yrs. ago. They didn't. They may not have even had enough warehouse space to increase production if they had. As I understand it, every rickhouse in Kentucky is bursting at the seams currently. They have probably been increasing production for a couple years now, but there's a gap between when that stuff is distilled and when it becomes ready to bottle and ship. That's how I understand it.
bibamus, moriendum est
Thanks Josh and Brisko, that makes sense.
I suppose I was a thinking too black and white about production and not thinking in terms of dynamic variables like forecasts and predictions. I'm used to the concept that once you start a product you continue production until you decide it isn't making money and shut it down.
|-o-| [-o-] |-o-| "I'm on the leader"
Rye was a very small (and despite the recent growth, still is) and stagnant market. The distilleries made "just enough" because there was no outlet for excess stocks. So with the aging requirements and little slack in the supply chain, we have the current shortages / outages.
"Drinking when we are not thirsty and making love at all seasons… that is all there is to distinguish us from other animals."
One, Janice's message, as compared to Jodi's, shows how this board directly affects the industry. I'm sure there was a bit of a flurry at Campari America this week as the directive went out to answer all WT 101 rye inquiries thusly. Congratulations! You all are players.
Second, although they spin it differently ("81 was in the pipeline"), there is some robbing of Peter to pay Paul, much as the Dickel shortage affected No. 8 but not No. 12 or Single Barrel, even though they all draw from the same pool.
"Shortage of rye" is a poor choice of words, because it suggests there is a shortage of rye grain, which is not the case. It means they don't have enough fully-aged rye whiskey to meet demand.
The best example of how this works is Maker's Mark, which has been on allocation for something like 25 years. All it means is that they have more demand than they have product available to meet it and even though they keep making more, demand keeps growing ahead of supply.
Production planning for whiskey distilleries is very complicated, as you can imagine. Jack Daniel's, for example, just plans for success and increases production (i.e., distilling) about five percent per year. I once asked Jeff Conder, who at that time was in charge of all production for Jim Beam, how they plan for 10 or 15-year thresholds. He said they really don't. "We just try to get the next five years right," was his answer.
Rye has been growing very rapidly from a very small base and who knows how long it will last? Be glad you don't have those kinds of problems.
Col. Charles K. "Crotchety" Cowdery
"Whiskey Don't Keep."
Chuck - that MM has been on allocation for the past 25 years is interesting given that it seems plentiful. Have they just been very good with the logistics?
"A person is smart. People are dumb, panicky, dangerous animals and you know it."