Handling Increased Demand

[kickert]

Do you work for a distillery Ben? I figure this is exactly the model most of the distillers bean counters would like them to head toward. A large supply of low proof young whiskey to underpin volume and a healthy premium on anything with a bit of age or proof. Just got to kill off those pesky historical value brands like OGD114, OWA etc that anchor the prices they can demand on "the good stuff".

Maybe I'm overly cynical, I sure hope so.

I used to work for a micro distillery, but I doubt that changes my view in any way. If you look at it from a business stand point (which all distilleries are), then high proof, high age, low price and constant stock can't co-exist as long as there is a market for the product. The same reason we like OWA and OGD114 is the same reasons they would be logical targets for "market adjustment" -- we know they are a great value.

The simplest option and the one most beneficial to the distilleries is just to raise prices until demand matches supply. Rather than see that across the board, I personally would like to see distilleries make quality cuts to the low end stuff while preserving the good stuff at lower rates. Just my opinion and it is worth what you paid for it.

[squire]

Or go to 700 mil bottles and claim "international" standards.

[zillah]

Tastes change. I am sure fans will be hurt, but I would rather have supply shortages that force me to check out other whiskeys. There are a lot of bourbon producers. Someone is bound to put out good product for a given season/year. Not every distiller is feeling the weight of increased demand, are they? The question would change from "What is a good bourbon?" to "What is a good bourbon right now?"

[squire]

That is a good question. When I present to the the local later today (weather permitting) I'm confident there will be something on the shelf right now that will suit my palate fine.

[kickert]

Tastes change. I am sure fans will be hurt, but I would rather have supply shortages that force me to check out other whiskeys. There are a lot of bourbon producers. Someone is bound to put out good product for a given season/year. Not every distiller is feeling the weight of increased demand, are they? The question would change from "What is a good bourbon?" to "What is a good bourbon right now?"

Now that I have reflected on it, I think this is probably the best option. There are many many good bourbons out there for a great price. I can stand to have some of them intermittently off the shelf. Of course when you are like Maker's that really isn't as viable an option because they have put their whole weight behind their standard bottle. I would think the same would be true for the "big name bottles" like Jack and Jim.

I can go without access to hopslam for most of the year, but people wouldn't put up with coors light being out of stock if that was your daily drinker.

[Trey Manthey]

Or go to 700 mil bottles and claim "international" standards.

I think you are being cheeky, but I would support this. The silver lining is that more international products would make it to the US. There might even be a price drop for imported stuff as they wouldn't have to create an extra 750 bottle anymore. I know that legislation would have to change for this to be possible, but it would be a welcome boon to the free market.

[VAGentleman]

Speaking of dropping the amount in the bottle, does anyone know when we went from the pint and half pint to the now ubiquitous 375 ml. I remember getting the 500 ml and 250 ml bottles of everything back in the day. Now we have a lot less (500 vs 375) for the same price

[HighInTheMtns]

I would prefer cyclical product shortages to product dilution. Look, Ritt100, Weller12 and other products are sometimes missing from the shelves and that's okay because a prudent man can stock up when available. Why should a producer want retail shelves full of unsold product? To catch some spur-of-the-moment buyers? To prevent losing sales to their competitors? If all of one's production is periodically sold-out, that's a good thing in my book.

Who really wants more water in their whiskey bottle?

Here's the real question in the MM case - Why should buyers suffer a diminished product due to failure in distribution logistics? (Common experience suggests there's MM sitting on retailer shelves in most locations all the time.)

I would prefer cyclical shortages as well but I don't see them as feasible from the perspective of the distillers (except for the limited-by-design stuff, of course). This is the reason:

Tastes change. I am sure fans will be hurt, but I would rather have supply shortages that force me to check out other whiskeys. There are a lot of bourbon producers. Someone is bound to put out good product for a given season/year. Not every distiller is feeling the weight of increased demand, are they? The question would change from "What is a good bourbon?" to "What is a good bourbon right now?"

Those of us here who are out trying to taste every whiskey under the sun aren't typical. If Maker's Mark, for example, allowed cyclical shortages to happen, the loyal MM drinkers would be forced to try something else. Maybe Larceny, maybe Weller, maybe not even a wheater at all. Some of them might like what they try better and switch brands. That being said, a couple days ago I picked up a bottle of Baby Saz which I see on shelves even less frequently than BTAC bottles. Cyclical shortages seem to be working fine for that brand.

I hope that the long-term solution to this is to increase production, but I realize that is a slow process at best. I'd take cyclical shortages over price increases, but ultimately, the more I think about this, I'd prefer outright price increases to increasing the price by lessening the product. Maker's Mark in particular doesn't hurt my feelings, but if the next one to get worse is a Weller bottle, I'll be very sad. It comes down to this: I'd much rather say "I wish I could get Eagle Rare 10/101 for what it used to cost" than "I hope that someday I am lucky enough to stumble upon a dusty bottle of Eagle Rare 10/101."

[Lazer]

Raise prices, cut bottle size so it won't hurt as badly.
700ml - good
500ml - good
375 - acceptable
250 - too small.

[HighHorse]

Great thread and a lot of good discussion. I'm a bit curious about the "shortage". Is there one? Here we are in financial hard times and US outlets are, for the most part, struggling to meet last year's numbers. There is, no doubt, a giant sucking sound heard on the barrel stocks coming from the Asian markets and the big boys are certainly turning their heads that way. The glut (and bastardizing) will be in the mass appeal popular brands and I can see these guys stretching out as far as they can get away with to grab as much of that low hanging fruit as possible.
We may be seeing these producers jockeying for position to hang on to that very small (5 percent?) of the market that we represent .. the premium market. Maker's did that with the 46 .. Beam .. HH .. BT .. are all on board with their more premium brands. We should be safe until they start tinkering with those.
The corporatization of this business won't be without consequences. I haven't met a corporation yet that didn't have a room full of bean-counters and bonus-inspired executives who couldn't figure out how to screw up a product and company in the chase for the holy grail.
We have left to cheer the private distillers and those new ones coming on board. The byword will be to buy them while they got 'em because they are all subject to being bought up by the corporations in time. It also makes it clearer to me why the distillers seem so eager to please when folks come their way to select barrels. That's still the pure stuff .. and it gives the MD a chance to show his/her talents.