When will BT catch up?

[ryanc]

Now they are paying $600.

[sutton]

I'm not sure if this is a marker of overall quality dropping, but the last OWA I had was very young-tasting and disappointing. The ETL I have open now (bottled this year) tastes an awful lot like BT to me.

Andrew, your comment is interesting to me because I have had exactly the opposite experience. I have a bottle of OWA from almost 3 years ago that was very thin and hot. That bottle has sat about half filled. Over the last year, I've had four separate retail bottlings of OWA that have all been 7+ years and have been terrific - full-bodied/creamy, no sense of heat etc. I've never had the 7/107 official botting, but I thought given that these private bottlings have shown up in the last year it might be a sign they were catching up ...

[PaulO]

A couple years ago, I bought several bottles of OWA in KY that tasted sort of thin. The OWA I got recently tasted pretty good. I would be all over 7+ year old store selections. I still have to wonder; how hard it will be to supply all these other brands and Weller.

[amg]

Andrew, your comment is interesting to me because I have had exactly the opposite experience. I have a bottle of OWA from almost 3 years ago that was very thin and hot. That bottle has sat about half filled. Over the last year, I've had four separate retail bottlings of OWA that have all been 7+ years and have been terrific - full-bodied/creamy, no sense of heat etc. I've never had the 7/107 official botting, but I thought given that these private bottlings have shown up in the last year it might be a sign they were catching up ...

The OWA I had was just a standard bottling, not a private selection. Glad to hear that they do have good barrels of it somewhere, though.

[kcgumbohead]

I for one would love to see all WSR held back and allowed to mature to a proper OWA and W12. The WSR in my cabinet is strictly for cooking.

"For me, the big question is - when the buying cools off (which I believe it must do because sooner or later you've got to face the fact that you've got an entire liquor store's worth of stuff to drink), will the new young distillate have suffered from off-ideal-season fermenting, short stave seasoning, and less pickiness about wood selection? In other words, yes, we will have a glut, but will the whiskey be as good as the stuff that was distilled in the spring or fall when the cooperage was ideally seasoned and not rushed"

TOT, I find the above quoted section very interesting and have wondered the same as the stories of ramped up/maxed out production continue to be issued from all the majors. Quality over quantity must rule the day always.

Edited November 26, 2014 by kcgumbohead

[Harry in WashDC]

RE: the cooperage issue - I remember a thread last year late or more likely earlier this year about it. Plus, Chuck's blog and his "Bourbon, Strange' discuss the cooperage shortage/demand rumors in detail including the availability of seasoned oak. Squire had some nice perspective, too, given his family's ties to lumber. I didn't look for the links, though.

[miller542]

For me, the big question is - when the buying cools off (which I believe it must do because sooner or later you've got to face the fact that you've got an entire liquor store's worth of stuff to drink), will the new young distillate have suffered from off-ideal-season fermenting, short stave seasoning, and less pickiness about wood selection? In other words, yes, we will have a glut, but will the whiskey be as good as the stuff that was distilled in the spring or fall when the cooperage was ideally seasoned and not rushed?

I think the overall reasoning will get closer to the answer of "when will BT catch up" but I wanted to focus on the one point quoted.

For anyone who believes a future new glut will be of sub-par bourbon, it creates a self-fulilling prophecy today. Those who believe current production is lacking will be inclined to bunker even more than a liquor store's worth of today's products to make sure they have enough of "the good stuff" later on. This buying further inflates current demand and pushes producers even further into an area of strained production.

I don't know much about the whiskey industry or producing bourbon, but it seems to me a wise distiller will stay the course, only marginally increase production, and continue to monitor the market regularly. Keep to your roots and keep doing things the old-fashioned way and resist the temptation to cash in on a boom by putting out sub-par bourbon. There is no sense making knee-jerk capital investments and risking the company's financial future just like there is no sense putting out swill and possibly doing long term damage to the reputation of your product.

Edited November 26, 2014 by miller542

[Flyfish]

For anyone who believes a future new glut will be of sub-par bourbon, it creates a self-fulilling prophecy today. Those who believe current production is lacking will be inclined to bunker even more than a liquor store's worth of today's products to make sure they have enough of "the good stuff" later on. This buying further inflates current demand and pushes producers even further into an area of strained production.

I wonder how much of the whiskey buying market is made up of people who bunker? Surely SBers are not typical but can there possibly be enough of us with the resources to significantly move the demand needle? Enthusiasts and wannabees might suck up all the LEs but could we even begin to put a dent in the supply of JB or JD? And what is the incentive to increase production of Pappy? When Beam "ran out" of KC, they used it as a marketing ploy to spur demand.

[PaulO]

I for one would love to see all WSR held back and allowed to mature to a proper OWA and W12. The WSR in my cabinet is strictly for cooking.

...

I strongly agree with this. I gave up on trying to like SR. Unlike the other two, it seems to be in a lot of stores. I

[The Black Tot]

I wonder how much of the whiskey buying market is made up of people who bunker? Surely SBers are not typical but can there possibly be enough of us with the resources to significantly move the demand needle? Enthusiasts and wannabees might suck up all the LEs but could we even begin to put a dent in the supply of JB or JD? And what is the incentive to increase production of Pappy? When Beam "ran out" of KC, they used it as a marketing ploy to spur demand.

Well, we're talking about BT wheaters here. W12 and OWA are certainly valued by enthusiasts. Also, JB is what, a 4yr turnaround product? I don't like Beam, so I don't know much about it. It's easy for a 4yr or less lag product to ramp up to catch demand. The youngest of the BT wheaters is the WSR, and I agree with the statements above - axe that if you must axe something, in favor of the OWAs and increasing the WLWs to Stagg levels. But once you're up to OWA you've got a 7yr turnaround, and that's a great deal tougher to react to demand. And all the other stuff gets exponentially harder with advanced aging requirements and the need to chop out the saplings to address demand for the young'ns.

Texas just got its shelves cleared of W12. I think that's bunkering. Just like ETL this summer. OWA is probably teetering on the verge of being the next target, and certainly already is in some markets.

The enthusiast wants the cut of WSR for more noble goals, but that may not make much business sense. People want the stuff NOW, and if it's available for sale, it doesn't make sense not to sell it when you're sitting on it. If you can sell it as WSR, then you can replace it in a few years - you've got to do that, from a business sense. Turnover pays the bills.

But then, it also sounds like it would make a lot of business sense to divert W12 to WLW, charging 2.5 times the price for maybe 1.5 times the whiskey (not sure how much exactly they lose on not cutting it to the W12 90 proof). Maybe there's a limited number of honey barrel spaces at the top of the rackhouse to crank the WLW up to it's high proofs. Getting the WLW release up to match Stagg numbers would help (a little, at least) with the BTAC pressure.

I've ordered Bourbon, Strange, but I can't get home to read it yet. I'm very keen on paying close attention to the cooperage situation. And also very keen on Squire's perspective.

I think they've got to get their new warehouse together in 2015 and just fill it with wheaters, and the problem will eventually sort itself out. But they can't use sub-par cooperage, or else what we've come to expect from a 7 year bourbon won't be there 7 years from now. And can you really have all these new rackhouses going up all over Kentucky at once and still resist the temptation to rush barrels out the door and maintain the discipline to properly harvest, cure, and cooper the same standard of barrel? It sounds to me like it's worth looking into. At what rate can the highest standard of barrels be made? Turnover pays the bills at the cooperages, too. And are the oak forests we're cutting down being re-planted?

It's a strange, wonderful, and horrible time for the industry. It's all too much, too fast.

How did the last glut work? Was there a previous boom, or just a steady, slow, petering out of demand, resulting in stagnation? It strikes me that the latter would make available the best selection of materials and the least-rushed production methods, the fruition of which we've enjoyed so well over the last 15yrs.

Edited November 26, 2014 by The Black Tot

[TunnelTiger]

I don't know much about the whiskey industry or producing bourbon, but it seems to me a wise distiller will stay the course, only marginally increase production, and continue to monitor the market regularly. Keep to your roots and keep doing things the old-fashioned way and resist the temptation to cash in on a boom by putting out sub-par bourbon. There is no sense making knee-jerk capital investments and risking the company's financial future just like there is no sense putting out swill and possibly doing long term damage to the reputation of your product.

I too do not know about the whiskey industry or production but it is the CEO and his teams duty to predict shortages and gluts no matter what the end product. It is also their responsibility to be able to increase production and maintain quality.

Those that can succeed handsomely. Those that don't see their brand loose market share and unless they are family get replaced.

[The Black Tot]

After reviewing two threads in particular (thanks H)

http://www.straightbourbon.com/forums/showthread.php?21998-Is-the-barrel-shortage-the-reason&highlight=Barrel+Shortage+Reason

http://www.straightbourbon.com/forums/showthread.php?21328-White-Oak&highlight=White+Oak

I learned that A) we are not headed for an oak tree shortage. There was a lull in barrel production, but not a critical one and it was short-lived. C) This topic can be quite a hot button issue.

As such, I am no longer worried about the barrel shortage, which is great news, because I am keen to stay excited about supply catching up and (fingers crossed) the return of lost age statements, and the expansion of limited editions.

[squire]

I am no longer worried about the barrel shortage, which is great news, because I am keen to stay excited about supply catching up and (fingers crossed) the return of lost age statements, and the expansion of limited editions.

I share that fond wish but alas fear we will no longer see the boom and bust cycles where unsold Bourbon would accumulate in such quantities that even standard NAS brands contained much older than 4 year old stuff in the mix. Bourbon is now on the World stage as never before and I'm informed, for instance, a single province in China can alone absorb an entire year's production of Four Roses output.

I think we will see increasing prices on high end Bourbons in the future with a corresponding emphasis on aged high proof expressions, but I don't see any return to the days when 8-10 year old surplus to requirement stocks are blended away into the middle shelf stuff.

[The Black Tot]

I'm not really yet convinced of the Asia effect. Time will tell, I suppose, but the more countries I travel to where I can only get Jack and Jim Beam White, the more relaxed I am about it.

Different cultures of the world have dramatically different diets and palates, I'm not sure yet how in competition we really are. I'm not saying anyone is wrong on the subject, just that I'm not yet ready to buy it.

[portwood]

I'm not really yet convinced of the Asia effect. Time will tell, I suppose, but the more countries I travel to where I can only get Jack and Jim Beam White, the more relaxed I am about it.

Different cultures of the world have dramatically different diets and palates, I'm not sure yet how in competition we really are. I'm not saying anyone is wrong on the subject, just that I'm not yet ready to buy it.

I share your scepticism. Recent financial results from Diageo seem to support this view.

Not only are palates different but regard for copyrights/patents/etc are not exactly very strong. Note how much "scotch" is produced in India with labels that eerily look like they were made in Scotland. What's to stop the Chinese and others from producing bourbon-like alcohol with deceptive labels for local consumption?

[portwood]

I share your scepticism. Recent financial results from Diageo seem to support this view.

Further evidence, this time from Remy Cointreau, things aren't all that rosy for premium spirits sales in China:

http://www.thedrinksbusiness.com/2014/11/remy-cointreau-reports-15-drop-in-sales/

[The Black Tot]

What's to stop the Chinese and others from producing bourbon-like alcohol with deceptive labels for local consumption?

Excellent point. What's to stop them even doing it properly for themselves? I just did a quick search on China's climate and in Beijing it swings from -20C to +40C. That sounds like pretty good whiskey maturing weather.

I could be wrong, but it would seem that the whole Asian demand concept presupposes that nobody in Asia will recognize that they are importing boatloads of product that they could just make domestically at great profit for themselves if they tooled up.

People cite the Bordeaux phenomenon, but getting good grain and buying barrels is far less terroir and location-dependent than wine. America makes great whiskey, Scotland makes great whisky, Japan makes great whisky. What's stopping China from getting on board for themselves?

Haha, maybe we'll be importing THEIR BTAC equivalents 15 years from now, at cheaper prices. Why not? - we do for everything else. Let he who has never set foot in a Wal Mart cast the first stone.

[T Comp]

This global demand concept has been around for a bit too. The Tot makes a great point too about dramatically different diets and palates.

http://www.businessweek.com/stories/1991-06-30/sweet-sales-for-sour-mash-abroad

[Flyfish]

People cite the Bordeaux phenomenon, but getting good grain and buying barrels is far less terroir and location-dependent than wine. America makes great whiskey, Scotland makes great whisky, Japan makes great whisky. What's stopping China from getting on board for themselves?

Speaking of boards, how are they set for American oak? For that matter, what did the Scots and Irish do before there were bourbon casks? What is the second best wood for aging whiskey?

[The Black Tot]

Speaking of boards, how are they set for American oak? For that matter, what did the Scots and Irish do before there were bourbon casks? What is the second best wood for aging whiskey?

Europe has oak. I have no idea about Asia. Maybe Russia has oak? Even if they had to buy US oak to get good whisky results (which I doubt), they could ship 'em over by cargo ship, no problem.

[portwood]

For that matter, what did the Scots and Irish do before there were bourbon casks?

Mainly ex-sherry casks made from European Oak (aka quercus robur) but also ex-port

At one time the English drank a lot of sherry and all of it was shipped to the UK in barrels. Some time ago (don't remember the year) a new law required bottling in Spain. Therefore, full barrels of sherry stopped flowing to the UK. That's about the time when ex-bourbon became the #1 ageing vessels for Scotch

I've read there are MANY species of oak found all over the world. Example: mizunara from Japan makes some fine whisky

Edited November 28, 2014 by portwood

[tanstaafl2]

Europe has oak. I have no idea about Asia. Maybe Russia has oak? Even if they had to buy US oak to get good whisky results (which I doubt), they could ship 'em over by cargo ship, no problem.

Oak is common throughout the northern hemisphere to include North America, Europe and Asia. And by now it has probably been transplanted to the Southern Hemisphere as well.

The specific species are generally different from one region to the next but I know China has a lot of oak species. But American White Oak typical for bourbon is primarily limited to the eastern and central portion of the US.

[squire]

What did the Scots do before American Oak?

Following the Act of Union in 1707 the English Parliament imposed such harsh taxes on Scottish whisky production the industry was driven underground. Of course the Scots continued distilling under cover of night by the light of the moon (origin of the term 'moonshine') but it was rough, unaged stuff. The tax burden was lifted by the Licensing Act of 1824 and the Scottish distillers went legit while also finding a market for an aged product. During this time the British were prodigious consumers of wine, brandy, sherry and port, most of which was imported in barrels in a variety of shapes and sizes. The emptied barrels were then available to the Scottish distillers who, being Scots, cheerfully used whatever was at hand and cheapest. Scottish aging warehouses were single story and didn't use racks as we know them so could easily accommodate all different sorts of barrels. After WWII used Bourbon barrels became cheaply available so their use became widely accepted by the Scots and Irish.

As for the Chinese, yes, they can copy darn near anything, sometimes quite creditably, but I don't think their bulk whisky will be any better quality than their knock offs of European cars, Rolex watches or American cigarettes.

When I speak of growing Worldwide demand for premium American spirits such as Buffalo Trace Antique Collection, I'm talking about affluent consumers who won't settle for a second rate copy. I can see BT catching up with regular middle shelf production but I also think domestic consumers will have to accept increasing prices on the premiums or see them sold elsewhere.

Edited November 28, 2014 by squire

[BillP]

What did the Scots do before American Oak?

Following the Act of Union in 1707 the English Parliament imposed such harsh taxes on Scottish whisky production the industry was driven underground. Of course the Scots continued distilling under cover of night by the light of the moon (origin of the term 'moonshine') but it was rough, unaged stuff. The tax burden was lifted by the Licensing Act of 1824 and the Scottish distillers went legit while also finding a market for an aged product. During this time the British were prodigious consumers of wine, brandy, sherry and port, most of which was imported in barrels in a variety of shapes and sizes. The emptied barrels were then available to the Scottish distillers who, being Scots, cheerfully used whatever was at hand and cheapest. Scottish aging warehouses were single story and didn't use racks as we know them so could easily accommodate all different sorts of barrels. After WWII used Bourbon barrels became cheaply available so their use became widely accepted by the Scots and Irish.

As for the Chinese, yes, they can copy darn near anything, sometimes quite creditably, but I don't think their bulk whisky will be any better quality than their knock offs of European cars, Rolex watches or American cigarettes.

When I speak of growing Worldwide demand for premium American spirits such as Buffalo Trace Antique Collection, I'm talking about affluent consumers who won't settle for a second rate copy. I can see BT catching up with regular middle shelf production but I also think domestic consumers will have to accept increasing prices on the premiums or see them sold elsewhere.

Well said, squire. It's impossible to copy Kentucky quality! Kentucky or China? The choice is easy at any price!

[Harry in WashDC]

. . . When I speak of growing Worldwide demand for premium American spirits such as Buffalo Trace Antique Collection, I'm talking about affluent consumers who won't settle for a second rate copy. I can see BT catching up with regular middle shelf production but I also think domestic consumers will have to accept increasing prices on the premiums or see them sold elsewhere.

While this likely will push us just a little further down-thread from the specific BT subject, it certainly fits. Back in July, some SB thread talked about worldwide demand, and I pulled up a Wiki article (appropriately titled "List of countries by alcohol consumption") that lists countries by alcohol consumption (duh!) - type (beer, wine, spirits both adjusted and not adjusted for relative alcohol content), per person over 15 or so, etc. If US consumption grows to match the heavier per capita drinkers overseas, we have plenty of growth ahead of us. Ditto for spirit growth vs. wine or "other" consumption in many countries - they have a ways to grow to match us. It makes for fun reading - like, just what IS that "Other" than beer, wine, or spirit which makes up 54% of Cape Verde's alcohol consumption?

Apropos Squire's comment - even if overseas consumption of whisk(e)y grows, wouldn't the sale of premium American spirits be just a small part of those sales just like they are here? If that's the case, maybe we'll be lucky, and the increase in price due to increased demand (i.e., we pay more to keep it "here") won't be as much as it could be. We might also be saved by the dryness of American whiskey, given the differences in palates. Ever had Chinese distilled spirit? Baijiu (of which the most well-known to travelers is maotai) is a distillate made from sorghum. If you like Canadian whiskey because of its sweetness or some of the younger rums, you should love baijiu.:shocked: