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BigBoldBully

Our ongoing observations about whether the boom has peaked

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BigBoldBully

My hope is that this thread can serve as a place to collect our observations and other evidence relevant to whether the bourbon boom has finally reached its zenith. Of course, it is only possible to be sure about such things once they are well in the rearview mirror, but I find it fascinating to try and see them while they are happening. Maybe if this thread can stay active for a good while we will end up with a conveniently concentrated repository. (If there already is an active one like it I apologize–I have not managed to locate one.)

I will start with a few observations that seem to indicate things are still escalating. This week, my local store has for the first time made the BT experimental 375ml bottles a one-per-customer deal. ECBP has gone up another $10 and is also now one-per-customer. (Some might argue it still represents good value, but I can currently buy excellent cask strength Scotches for less, which really puts it in perspective for me.) Even a freaking Jefferson’s NAS vatting has a one bottle limit! And we all know about the OGD repositioning and price hikes. Meanwhile, at the grocery store with the best selection, they now keep regular old BT in the glass case (when it is actually available) and EC12 has gone up by $9.50 (nearly 50%) since I started buying it there in 2012.

What have you noticed recently that makes you think the boom (bubble?) is continuing to intensify, is peaking, or is busting?

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393foureyedfox

i have no real trouble buying the bottlings that I am interested in buying, but I dont buy or even seek out anything "rare", "collectible" or "limited". I do, however, continue to buy things and put them away out of concern that either they will be hard to get later, or the prices will go up significantly. The only price increases Ive seen have been on most BT products (when you can even find them) and WFE stuff. Ive only seen ECBP once and learned I have no interest in seeking another, and have seen no increases in OGD. So, I think the 'bubble' is pretty limited, at least so far.

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ken_mays

No doubt there are regional trends. In the Mid South I have seen the Weller 12 go out of stock and stay that way over the past 4-5 months. OWA107 seems to be following suit. ECBP is whisked away into back rooms and never sees a shelf. SA OS BP ryes and bourbons have jumped from ~35 to the low $50s. Stagg Jr seems to be increasing from 50 to 60 or more in some shops. Most everything else is static or suffering minimal price increases at most. Beam stuff is staying on the shelves in droves.

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squire

I think Bourbon has been launched onto the World stage as never before and it will be some time before we realize the full impact of that.

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dcbt

Still escalating. A local store included W12 in its latest raffle - you had to win the right to buy one bottle. That probably doesn't strike a lot of people oddly but here in texas we are used to tripping over it every time we left the house.

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Scotch Neat

I believe that we are partially to blame for the bourbon boom by hoarding and buying more the we need.

Not so many years ago did we really have bunkers of stashed spirits, no, you went to the store and bought one or two bottles to take home.

Did your father have 50 or 150 bottles stashed? Mom would of verbally kicked dad's ass.:893drillsergeant-th

Now people go in and grab many more bottles than they need feeling it may not be there next time or will be of reduced quality.

I am also guilty of this.

Today we watch people buying wine and liquor with shopping carts, don't recall my parents doing that.

I believe the boom will continue for many years to come.

OK have to go now, I see an couple of EC12's on the shelf, need to grab them in case I go through the 17,000 bottles in my bunker!!!!:lol:

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The Black Tot

I think it's closer to bursting than ever. Quality has become less relevant, giving way to more and more extreme monetization and the aftermarket trading of coveted limiteds. It resembles an amateur stock market more and more each day.

Gradually worse bourbon selling for gradually more money.

Bunkers swelling everywhere. Veteran posters talking about how they haven't bought anything in two weeks, three weeks, a month...

Four Roses doesn't have enough highly aged stuff left to do a single barrel limited for 2015. Their picks now peak out below 11yrs in age, with most 10 at best, and a lot of 9s. It's now getting tough to find or pick a Smooth Ambler 10 barrel proof. SA is offering 7yr picks now. Last year I bought a few 11s, because I had the feeling I wouldn't be seeing them for a while.

ECBP, as mentioned above, is getting to be poorer and poorer value in most places. People seem to be finding it easier now in markets where it used to be harder, and when they do they are buying 3-cases at a time (judging from car shots on fb). I think it's now to the point where ECBP could be sold at a better profit margin than EC12. ECBP could be ramped up in production pretty easily (does it have an age statement? I don't remember).

Stores have lost their minds thinking it's perfectly reasonable to have up to 900% markups on their product. Poor saps out there reinforced this by paying it at the start, but more and more I'm reading about these $350+ BTACs and $800 Pappys sitting on shelves in the "What bourbon did you pass up today" thread. I think that's an early indicator.

The only distilleries with what seems to be a lot of high-aged bourbons are Diageo's Stitzel-Weller (only a distillery in name, we know). HH and BT have their usual slowly climbing allocations of the higher ages - too slow to meet current demands, but they refuse to pillage their rackhouses and insist on pace.

The inability and frustration of newer enthusiasts to find limited bourbons is resulting in a pressure that is pushing out into other spirits. Some of it is blowing back into scotch, but nearly every spirit category is going through a process of premiumization where people even with working class jobs think you need to spend $250 on a bottle to make something a special occasion. Some very expensive tequilas and rums have emerged and are emerging. That new normal is here.

By the end of 2015, two new major stills will be in. Bulleit and Michter's. I'm sure I missed at least one. Willett's own make 4yr products come online in about a year and a half. BT will have a new large rackhouse in 2015. MGP now offers a wheater. The Old Taylor Distillery comes back to life in early 2016. In short, 8 years from now we'll be swimming in the stuff, and you can't sell that much MORE bourbon at the presently inflated pricing. People can't consume that much, and many of them also can't afford it.

The economy is still fragile (the whole oil sector is presently tanking (pun intended - I'm in it so I get to make jokes), and interest rates have only one direction to go from close to zero, which would dramatically reduce people's bourbon budgets).

4R limiteds have gone to $70+ (if you haven't seen that yet, it's only because your store hasn't sold out of it's $50-level stock yet), and get this - a group I know of was just quoted $70s for a 2015 SAOS 9yr barrel pick. Yup.

OWA and W12 seem to be bouncing back in availability in their traditional markets. BT's ramped up production will reach OWA age in just a few years. Even ETL will probably catch up by the 2nd Oct release this year.

So the brakes are on, and hard. Prices are hitting new levels this year, the bourbons are going to be capped at lower ages, and the traders and flippers don't care that their "product" has increasingly lower value or significance despite higher and higher pricing.

Sillier and sillier products hit the market. Sauternes finished this and Grand Marnier finished that. Double oakings and toasty barrels. Whether they're good or not (and some are), they're still reaching for ideas.

The more experienced guys are getting off the merry go round in packs now. For now, they're being replaced with the late twentysomethings in their bar years who have seen the premiums explode onto the craft bar menus. But there isn't another wave behind these guys, and if this bubble bursts and the thousands they put into it all crashes in value, they'll be turned off pretty quick. They're also, demographically, about to soon get married and have homes and families to pay for.

People also eventually learn (as I have, a while ago, thanks guys!) that there's a few <$30 bottles that they actually really enjoy drinking. When these new younger limited-chasers get to that point (and it will happen fast based on the accelerated rate of their buying), look out super-premiums.

I'm not an early adopter by any means, having only gotten serious about bourbon in early 2014, but even I'm already sitting back with my bag of popcorn, watching people do worse and worse value things with each passing month. Each month it's easier to say no to the newest wave of limiteds.

It's a very fascinating time. I think the producers know that the only way to keep this premium market going is to keep us bedazzled with a steady stream of limited offerings (which a lot of them are struggling to create, as mentioned above). Too long of a drought and people will move on, lose interest, or perhaps more accurately, get detoxed out of their addiction to the limited hunting/purchase rush. There's a large and conspicuous gap between now and October. I think BT should return to spring and fall bottlings of BTAC and pappy, personally, although it would probably just drive the retailers even more nuts with people harassing them.

Anyway, looking at it, there's not a lot of super fab bottles scheduled between now and then. I think we could really start to see a building wave of enthusiast apathy this year. Not enough to make BTAC easy to get this fall, but maybe a little less crazy than 2014.

So that's my March 2015 state of the bourbon union address, haha. I predict a cooling but not a crash for the end of 2015, driven by less availability of truly exciting product and a resulting switch to lower-shelf enthusiasm or other spirit categories. The crash comes in a few more years when supply starts to get out of control.

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EvergladeSlim

I recently created a temporary facebook page, and I figured while I had it I would peruse some of the bourbon trading sites to see what they had to offer. If that experience has shown me anything, it is that the current state of the boom is worse than I ever imagined. These sites are chock full of people flipping orphan barrels and W12s to each other at an unprecedented rate. Got a bottle of Baby Saz? Take pictures of it in your car and ask for offers. ETL? - oh man you are hot shit. Stagg JR!!! - ahhhh gimme gimme gimme! EHT small batch - "serious offers only please." It doesn't end. Big Man, Small Batch - buy all that you can your hands on!

Anything at all perceived as limited is a must buy. And since just about everything is marketed that way now there tons of idiots who just drive around buying up all the mediocre shit they can get thier hands on only to rush home and put it on facebook. But there really is little risk involved for them to do so because people new to this hobby will happily give them $200 for a bottle of Old Blowhard. It is sickening.

Ok - my rant is over.

*If you took offense to my post here, then that is what I intended.

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Spade

My sense is that, for the moment at least, the bubble is limited. It's increasingly difficult — practically impossible in some cases — to get limited edition stuff. And, some regular Buffalo Trace bottles are harder and harder to find or overpriced (recently saw Baby Saz for $40), but I don't have a hard time finding most of what I'm looking for. And while prices seem to be increasing a bit faster than inflation generally, the increases are not totally off the wall for mid-shelf and lower bottles. I could go and get a handful of favorites from Heaven Hill or Wild Turkey and pay maybe a dollar or two more than a year or so ago.

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MTNBourbon

Here in UT we do not get alot of the stuff that is being talked about on this forum. I can live with what we do have here. I'm going to bunker some though. The prices are pretty reasonable also, since the last 3.5 years (since I've gotten into bourbon) they've been, but then again I don't pay that real attention to the prices. I do not feel I'm being gouged, I just wished they would get/maintain a better selection. I'm also including beer, rum, and wine on that list.:cool: I hear that sometimes some really nice bourbon does arrive, but it's all about timing.:cool:

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Sean Bond
Still escalating. A local store included W12 in its latest raffle - you had to win the right to buy one bottle. That probably doesn't strike a lot of people oddly but here in texas we are used to tripping over it every time we left the house.

I actually had a local place get one bottle each of ORVW 10, VW 12, OWSR and OWA, and they put them up for bidding (you put your name down, with your bid, raising the last person by, I don't remember, $5, maybe?). This happened while both Wellers were literally ALL OVER the city. The Wellers didn't sell, to my knowledge, but obviously the Van Winkles did. However, all forms of Weller tend to sell out pretty quickly around me; it was mostly by luck that I was able to get a couple 1.75L bottles recently, because they tend to sell out within a day or two. Wayyyyy too much "poor man's Pappy" hype.

In answer to the original question, I would imagine we're getting close to peaking, but in places like Chicago, where the craft beer boom is not only in full swing, but is pure madness, a lot of those guys also seem to be jumping on to the bourbon train (unfortunately). So I think we're going to get a little more sustained growth while some bros and hipsters migrate, and once they decide that chasing full bottles of hard liquor isn't quite as economical or practical as bottles of beer, we should start seeing the growth slow.

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The Black Tot

I think the hipsters are getting ready to migrate OUT, not in, at this point. Too played out, man. The next big thing is boutique Mezcal finished in used Tabasco barrels.

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kjbeggs

I hope you are right TBT, but it seems there are still "Death & Co" copycat bars opening up, or switching to that old style quality cocktail model.

The real kicker for me is how every time I stop in to one of the big chain stores, there are two or three new bourbon labels fighting for attention.

Mostly bottom shelf bourbon with mid-shelf price tags and top-shelf packaging. When those labels start dying off, and new ones stop appearing, then I'll feel like the Boom has finally started to recede.

(Or when I can finally find multiple bottles of ETL on the shelf again...)

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The Black Tot

Given the production lag to get to market, K, I think the popup of new brands will go on long after the bubble has burst.

Saturation of the market by all these new brands is part of what will turn new people off, I think. I remember my first walk through a huge scotch aisle and thinking "there is no WAY I'm going to be able to figure this out!"

Re: the D+C emulators, we can probably use a few more bars that can do more than mix a Jack and coke. We could use them even more if they don't charge $15+ a drink, but probably too much to ask at this point. Me, my 2015 will be spent buying the cocktail recipe books...

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TunnelTiger

I think Congress is closer to balancing the budget than whether the boom has peaked.

My gut is you haven't seen nothing yet.

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garbanzobean
I hope you are right TBT, but it seems there are still "Death & Co" copycat bars opening up, or switching to that old style quality cocktail model.
I think this is going to be a serious pain in the rear going forth. More and more on premise accounts are upgrading their bourbon selections. Even if folks get bored of buying LE bourbon, plenty of people (many of us included) will be happy to plunk down a decent sum of money to check something off the ol bucket list. So unless your state has laws protecting the consumer from competing directly with on premise accounts for allocated products (or a bunch of fancy bars go out of business), I think we are in for a rough ride yet. With that and the expanding international attention on bourbon, I'm not sure this is a door can be closed after being opened, as far as LEs go. I think we'll get the mid/upper shelf back sooner rather than later, though. Hoarding cases of W12 will quickly result in collector fatigue, but I think plenty of folks are going to be willing to hunt down teh pappiez. What I am more excited about is the slow spread of craft distillers that are "doing it right" and slowly rolling out properly matured products. Old fashioned techniques (low proof off the stills, low barrel entry proof, etc) are going to pay dividends for the few that go this route. I am hopeful that some of the flavor profiles we consider to be "dead" will return. On top of that, the establishment of new large distilleries per TBT's comments should help keep the shelves from becoming completely barren. Now the scotch/malt whisky market. That sumbitch has to be nearing a crash soon. You can't keep pumping out the quantity of mediocre to bad spirits that they are right now and survive off the 20-30% that you can sell as single malt. It's just not feasible. The Diving for Pearls blog has an interesting series on why the market there might already have burst.

Ironically, what I am most thankful to SB for (besides hammering into my dense skull the fact that mid and bottom shelf bourbon is generally pretty good to awesome) is introducing me to alternatives to bourbons and scotch style whisky: Cognacs, Armagnacs, other aged brandies, and now even rums that I enjoy as much (or nearly as much, anyway) as distilled cereal grain products. While it can be a bit of a chore to find releases that don't have a bunch of unwanted extra shit in them, there is some really good stuff out there, and the QPR is excellent.

Edited by garbanzobean

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The Black Tot

Great point about the craft distillers, Eric. We're really going to need each other here in the coming years to help each other sift through all the small releases. And yeah, like you I'd have to think some of these producers have clued into the potential for using "the old ways". I only hope their reward for excellence isn't to release a mature product straight into a glut.

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393foureyedfox
It's now getting tough to find or pick a Smooth Ambler 10 barrel proof. SA is offering 7yr picks now. Last year I bought a few 11s, because I had the feeling I wouldn't be seeing them for a while.....a group I know of was just quoted $70s for a 2015 SAOS 9yr barrel pick.

ouch! glad Ive been stocking up on $45 8 year BP SAOS's!

Ive seen 10 year SAOS and passed on it, expecting the 8 year bottles to be more to my liking. Havent seen anything older than 8 years in a while, but like I said, that doesnt bother me one bit.

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ramblinman

Seems crazier than ever to me, for some reason I follow the bourbon subreddit, and the kids there are getting excited about finding weller special reserve. Bourbon, and especially wheated bourbon has went all kinds of nuts and I'll be damned if I can tell whats driving it from the cultural side but its definitely happening.

I was at my little sister-in-laws engagement party a few weeks ago and was talking with a bunch of 22-26 year old guys and every one of them was either into bourbon or wanted to be.

I don't see the crazy slowing down, but I do see less and less pressure being put on the quality midrange pours from the big guys, theres enough NDP/craft junk on the shelf with pretty labels that it hopefully will mean 4RSB, OGD114, WT101, and the plethora of options from HH will still be available at reasonable if slightly inflated prices. If you like BT stuff though, I think you're going to be in for a long ride of low supply and arbitrary high prices for common stuff. Its got the stink of pappy and antique collection on it and thats going to stay in the public conscience for a while.

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garbanzobean

I was going to make a smart aleck comment about how we'll know that bourbon has peaked when it approaches the completely ridiculous pricing structure of Japanese whisky, but then I thought up a bunch of examples of how it sort of already has, and then I also realized that neither one looks like it is going to slow down anytime soon.

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flahute
I really can't speculate since I have no insider's knowledge into the business. I really appreciate all of the comments so far though. Your predictions make for some very interesting reading.

What I'd really like someone to elucidate on is what it'll be like after the boom is over, after the bourbon obsession peaks, and after the bubble bursts. Once the hipsters have moved on to something else, once us older gentlemen have fully satisfied our bunker inventories, and once distillery production finally catches up with demand -- what then?

Will the hard-to-find, premium stuff then become commonplace? Will prices for any bourbon drop significantly? Will any distilleries shut down? In other words, will there be any major repercussions to the upcoming bourbon bust (if it even happens)?

Whenever you read someone here mention the "glut" years, that is the partial answer to your question. Though you can't count on history to repeat itself exactly, and the circumstances going in are different, during the glut years some distilleries shut down or got swallowed up by larger ones and some age stated bourbons actually had bourbon older than the stated age in it because the distilleries had aging stock they couldn't sell. All those legendary old Willet bottles you read about were leftover stock that couldn't be sold back when it was at whatever age it was originally meant for so it sat and aged and became something different until KBD and others came along and snatched it up just in time for the boom.

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Paddy
Whenever you read someone here mention the "glut" years, that is the partial answer to your question. Though you can't count on history to repeat itself exactly, and the circumstances going in are different, during the glut years some distilleries shut down or got swallowed up by larger ones and some age stated bourbons actually had bourbon older than the stated age in it because the distilleries had aging stock they couldn't sell. All those legendary old Willet bottles you read about were leftover stock that couldn't be sold back when it was at whatever age it was originally meant for so it sat and aged and became something different until KBD and others came along and snatched it up just in time for the boom.

Funny how I just deleted a similar post.:grin:

I do think there will be another glut. But given the untapped global market that the distilleries are eyeing (like a teenager eyes a Victoria's Secret catalogue), I fear that the future glut will leave us awash in only youthful mid to lower shelf standards that are nothing like the molasses colored candy corn honey barrels of our wasted youth.

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flahute
Funny how I just deleted a similar post.:grin:

I do think there will be another glut. But given the untapped global market that the distilleries are eyeing (like a teenager eyes a Victoria's Secret catalogue), I fear that the future glut will leave us awash in only youthful mid to lower shelf standards that are nothing like the molasses colored candy corn honey barrels of our wasted youth.

My fear also. I got into this too late to benefit from the most recent glut and though I don't wish to witness distilleries going out of business, I would like to see BTAC and other aged bourbons sitting on shelves at regular prices with no need to chase them.

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Tony Santana

The boom is still booming. Prices are going up, certain labels - even non-premium labels - are in demand/short supply, the media is still touting bourbon as the hot new spirit, foreign markets are expanding, the secondary market is still crazy and craft distillers are still popping up all the time. Premium brands - or even wannabe premium brands - sell out often without ever seeing a shelf. Pick nits with any of those statements if you like, but I think almost everyone who frequents these forums will agree with them.

That said, I think the bubble will burst within the next couple of years. The big boys have ramped up production and storage capacity, new big or quasi-big players (Diageo, Michters, Angels Envy) are building distilleries. The market analysts don't have crystal balls, but I can only assume every big player employs them and they know more than you and me - they've made a pretty good market and demographic based forecast of what's going to be required in the way of production in the upcoming years. They don't want to make too much, and they don't want to make too little, and it's all more of a science than it was 20 years ago.

So things will ease up a bit. Some people who've jumped on the fad bandwagon will find a new fad to follow. Some of the people who are relatively new to the hobby will stop going nuts with purchases and just start drinking up their bunkers. Others will achieve Bourbon Zen and realize they can be just as happy with Four Roses Single Barrel or Old Grand Dad 114 and that you can drink very good bourbon without chasing the limited releases and paying crazy prices. The strong will survive in the craft distillery game and a number of them will fold up their tents. The secondary market won't go away, but it will cool down. Even when the bubble bursts you won't be able to walk into just any liquor store and find Pappy on the shelves again - there are too many new enthusiasts to think that will happen, because some of the newcomers to bourbon will stick around (because it is great, isn't it?) and they'll always want to try the fabled limited editions. But the pressure will ease.

And remember, the great majority of the market will still be drinking Jack, or Jim, or Evan Williams, and will think of Makers Mark or Woodford Reserve as the really good stuff, and those bottles will always be there. Hang onto your hats, it's still going to be a bumpy ride for awhile. And then things will start to ease up, and there will be a crapload of good whiskey available at prices that will stabilize, albeit at a higher level then we're at right now.

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Paddy
My fear also. I got into this too late to benefit from the most recent glut and though I don't wish to witness distilleries going out of business, I would like to see BTAC and other aged bourbons sitting on shelves at regular prices with no need to chase them.

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