I was just thinking tonight (as I procrastinate, listening to the Dick
Spottswood show streaming Old Timey music...) about the long term
outlook for bourbon.

What might happen to the industry that might cause its downfall?
As a disclaimer, I'm not overly worried that these things are
going to happen... but they're worth thinking about nonetheless.

The first thing that EVERY industry should fear is Wal-Mart, which currently
sells, what, 20% of the country's dog food, a lot of it their own brand.
And they just got into the soap business as well, much to the chagrin
of soap makers.

Would Wal-Mart ever go into the bourbon business? Perhaps
contract distillation, or their own label(s) of bulk bourbon, which I'm
sure a few distilleries would gladly sell to Wal-Mart?

I can think of a few reasons why they wouldn't do so. They might have
moral qualms against it. It wouldn't allow them to leverage their sweet
distribution network, since alcohol requires a distributor's license. The
profit opportunity might be too small.

I would guess that if the do get into the business, they would go big with
alcohol in general, pouring money into buying legislators to overturn
distribution laws, and developing all sorts of products, from vodka to wine.

The other think thing to fear from Wal-Mart is concentration of power.
What happens if Wal-Mart sells 25% of the country's bourbon? Will they
be able to dicatate terms to distillers?

Other long term issues:
Marijuana legalization. If I were a betting man, I'd say that Canada and
the EU will eventually legalize (or at least radically decriminalize) cannabis.
Will the US follow? Once the baby boomers start to die, will GenX voters be
less conservative than today's voters? Will legal marijuana compete with
bourbon?

What about aging populations in general? Classical music and opera are
having a hard time getting younger ticketbuyers and album buyers. Will
bourbon's all-American image continue to appeal to the next generations,
or will they be wooed away by sugary booze and beer's advertizing budgets?

Legislative threats? (These are bit less likely.) Will states tax distilled
spirits out of existance? The beer people would love that. Perhaps a
wave of anti-smoking, anti-"hard liquor" fervor might lead to all kinds of
bad legislation.



Just a few idle thoughts.

Tim Dellinger