Our ongoing observations about whether the boom has peaked

[The Black Tot]

I've never gone to the secondary market. For some reason I think I'd be more inclined for a dusty, but I hate to feed into that mentality. I've got plenty to drink without going that route.

[The Black Tot]

I think the mid and bottom shelfers will catch back up in a few years but I honestly think the limited releases will remain hard to get for a very long time. There are simply way too many consumers and too little product to satisfy and thanks to the Internet I don't see that supply catching up to the new world market.

Edited March 31, 2015 by The Black Tot

[TheEgg]

I think the bourbon boom started out with consumers simply discovering how good bourbon can be.

Now, I think it is being driven by the "cool hipster" crowd and the collectors. I see this rapidly fading, as the hipster crowd is always looking for the next big thing (Apple Watch anyone?). And, judging by how many bottles the collectors have already scarfed up, even their appetite has to be tempered soon.

Although I don't think there will be a bourbon bust per se, I think the boom has got six to twelve months left, max.

[Chris m]

I really have no interest in the secondary market for two reasons: 1) I'm morally opposed to it 2) I don't trust people on the internets (not you lot, you're all great, I'm sure).

That being said, if I met someone in person that offered me $250 for a bottle of ORVW, I would sprint home to grab a bottle. Morals are morals, but think of how much EC12 I could buy with $250!

[The Black Tot]

e $250 for a bottle of ORVW, I would sprint home to grab a bottle. Morals are morals, but think of how much EC12 I could buy with $250!

[ThirstyinOhio]

What there are is too many speculators. There is far more whiskey, even premium whiskey, being sold than consumed. Too many collections and too many purely for-speculative-profit inventories.

I'd venture to say they make more premium and limited whiskey than the actual rate at which it would be consumed if there wasn't flipper and hoarder involvement. I'm not exonerating myself, I have built a bunker and therefore fall in the hoarder category.

I think the secondary heavy users are going to realize in a little while that they've been buying on two misguided concepts - A) that their vision of how many "special occasions" that require a $300+ secondary bottle vastly exceeds the number of special occasions they really have, and that the $300 secondary bottle really makes the occasion that much better than the well-chosen semi-regularly available non-unicorn $60 bottle in the first place.

edit- to expand further, people who start out by jumping straight into the fray to spending big bucks on secondary or even retail limiteds will eventually likely spread out to finding the "value mids" like 4R barrels and OWA, etc. Natural human laziness will ultimately mean they will choose the easy and most affordable way to the achievement of their target lifestyle.

Probably people are soon going to get "too cool to queue for Pappy". They'll get over chasing limiteds. Anything under too much pressure, that is too frustrating, will change. People will get sick of paying $300 for bottles, we're just not there quite yet.

I disagree. Even if every limited bottle was sent to bars or found its way into the hands of people like us who actually drink them, the demand far out strips the supply. It's not that it's just a fad, it's an awakening in the marketplace, here and abroad. These are not brands like PBR and Coors Light who "everyone" knows and enjoyed an uptick in popularity because of a fashion trend. What we are witnessing is an awakening to a whole new product for most.

The vast majority of people only knew bourbon as stuff you did shots of to get trashed. Could you have named more than 10 bourbon brands 5 years ago? The world of bourbon has been thrusted upon them from every direction thanks to articles in major publications, online media platforms, movies/TV, and their local bars and restaurants. While only a small percentage turn into true bourbon "enthusiasts" like you and me, there are a heck of a lot who become intrigued and search out for even more information. These people go on the distillery tours, they attend bourbon dinners in their local areas, and they start learning about all of these limited releases and they start seeking them out too.

This isn't all that different than what happened to the wine world once the U.S. developed a taste for it and the market for limited edition wines still haven't caught up.

This isn't a fad, it's a god damn epidemic and the only cure is to raise the prices so high on the bottles that there is no room for flipping just like what some stores have done. Only then will we all be able to have a chance to buy these items.

[squire]

Yes, Bourbon is not a finite resource, they're making more of it every day.

[El Vino]

Yes, Bourbon is not a finite resource, they're making more of it every day.

Good point. But the real question is how much more do they intend to make. I would bet that they like the pricing power that they have (and are using) in a market swamped by demand. Make too much and they might lose some of that power. That said, the flippers are the ones who benefit from secondary market sales. Some smart analyst probably knows how much more to make to take the teeth out of the flippers without losing pricing power.

[The Black Tot]

I partially agree, Thirsty. It's an awakening. Sort of. I say sort of because it's a pressurized awakening, it's like waking up to taps played with a live trumpet a few feet from your ears, with you jumping straight out of bed onto the track.

This awakening is happening from the top down, rather than the bottom up. People start by saying "What's the best? I want that!"

They start fighting over limiteds before they even know what they like to drink. This is an unusual method of awakening.

It isn't an organic groundswell of connoisseurship (I wish, actually) - it's a who's got the hottest most pornographic bottles on their bar competition. It's a status competition, and for others still, it's a grown up stamp collection.

History has shown that there is only so much of a population that really appreciates finer things in life for what they are. So no, I don't think we're entering an age where suddenly every Joe six pack is going to be doing blind tastings to discern the differences between a 5yr vertical of OWA.

It's easier to learn what's rare/in demand/can be profited from than it is to learn what's good and why. We're seeing an exponential blowup of the former (not sustainable), with much slower development in the latter (sustainable).

I think the status crowd will find something else limited and start fighting over that, leaving the enthusiasts who aren't status seeking behind to get back to comfortably buying their sufficient allocations.

Edited March 31, 2015 by The Black Tot

[ThirstyinOhio]

I still disagree TBT, it's not all top down as evidenced by many of our favorite mid shelfers disappearing. Who is buying up all the ETL and Weller?? It's not all showing up on secondary market pages, not even close. As for fighting for limiteds, of course people are, it's human nature and we are talking about a "luxury" good that can fit into the majority's budget. I'd like to see an example where people don't rush out to purchase/consume what they perceive as the best when it's in budget.

I'm all for trying bottom and mid shelf bourbons, but don't sit there and tell me that you have to eat a bunch of flank steak before you can truly appreciate a Kobe ribeye. Even a converted vegan would enjoy the mouth orgasm from macerating on that fine bovine flesh. Sure, I could buy one heck of a lot flank steak instead of that ribeye but I believe the old saying goes "Quality, not quantity".

Edited March 31, 2015 by ThirstyinOhio

[The Black Tot]

I see so many snapshots of ETL and W12 on facebook groups it isn't even funny, Thirsty. Both of those and ECBP have been low-margin flip bait all year (by low margin I mean "only" 60-75% mark up)

Since the commemorative got people interested in ETL it's been media swarmed, and everyone has read about "poor man's pappy".

I've never had a kobe (ethical objections) but I do know from my own experience that some bourbons took me some experience to appreciate. You can't sit a newbie down and serve him WLW - he'll scream in pain because he hasn't learned how to drink a barrel proofer.

Same thing in music. Most people start with pop, grow into jazz, then end up at classical. Or they stop anywhere along that spectrum. There aren't many 17yr old opera fans.

[Harry in WashDC]

. . . This isn't all that different than what happened to the wine world once the U.S. developed a taste for it and the market for limited edition wines still haven't caught up.

This isn't a fad, it's a god damn epidemic and the only cure is to raise the prices so high on the bottles that there is no room for flipping just like what some stores have done. Only then will we all be able to have a chance to buy these items.

This struck a cord. When the Bordeaux I'd been drinking for years crossed $100, I stepped down a Cru or two and also started trying other appellations and countries. Funny thing happened - I found that I really liked these substitutes. When the Bordeaux prices moderated, I didn't go back but stayed with the substitutes (well, still buy third & fourth growth). Similar thing happened with bourbon - I used to drink mostly JD rocks and EWB in cocktails but kept Lot B for myself and didn't buy much else. Occasionally, MM would sneak in there, and in restaurants, some places had this stuff called Buffalo Trace. When Lot B became scarce/disappeared/got obscenely expensive, I went looking for a replacement. I found a whole world of bottom, middle, and upper shelf bourbons I could love, mostly without reservation, so I tried stuff I'd never considered. In short - I'm not sure I even care about those LEs anymore. I certainly can afford them, but I'm too old to chase them (or anything else for that matter:rolleyes:). I do buy a couple LEs a year - from retailers whom I trust (and you know who you are as you read this:thankyousign:). In short, the "boom" has taught me to keep on truckin'. Hell of a ride, and I enjoy it every day. Thanks, in part, to SB.

I wonder if there are a lot more bourbon geeks out there like me than we think. If so, we should all let those flippers/speculators/arbitraguers/nouveau riche have at it while we sit on the porch and sip our WT/OGD/VOB/(put your fave here) and smile.

[flahute]

This struck a cord. When the Bordeaux I'd been drinking for years crossed $100, I stepped down a Cru or two and also started trying other appellations and countries. Funny thing happened - I found that I really liked these substitutes. When the Bordeaux prices moderated, I didn't go back but stayed with the substitutes (well, still buy third & fourth growth). Similar thing happened with bourbon - I used to drink mostly JD rocks and EWB in cocktails but kept Lot B for myself and didn't buy much else. Occasionally, MM would sneak in there, and in restaurants, some places had this stuff called Buffalo Trace. When Lot B became scarce/disappeared/got obscenely expensive, I went looking for a replacement. I found a whole world of bottom, middle, and upper shelf bourbons I could love, mostly without reservation, so I tried stuff I'd never considered. In short - I'm not sure I even care about those LEs anymore. I certainly can afford them, but I'm too old to chase them (or anything else for that matter:rolleyes:). I do buy a couple LEs a year - from retailers whom I trust (and you know who you are as you read this:thankyousign:). In short, the "boom" has taught me to keep on truckin'. Hell of a ride, and I enjoy it every day. Thanks, in part, to SB.

I wonder if there are a lot more bourbon geeks out there like me than we think. If so, we should all let those flippers/speculators/arbitraguers/nouveau riche have at it while we sit on the porch and sip our WT/OGD/VOB/(put your fave here) and smile.

Yes to this!!!!! I'll admit I can still get irrational about a certain George T., but everything else limited has become less interesting to me at the current price and hysteria levels. I've tried 'em all at this point (except Hirsch) and they just aren't worth the secondary prices.

[Harry in WashDC]

flahute - Funny you should mention the GTS. THAT's my most recent LE purchase - I can make a neat one ounce pour last close to an hour.

[flahute]

flahute - Funny you should mention the GTS. THAT's my most recent LE purchase - I can make a neat one ounce pour last close to an hour.

You and me both. Dang.....I just get silly for this one. It was my first limited (and first "high end") bourbon and remains my favorite after the plethora of bourbons I've tried since then. How often does that happen?

[The Black Tot]

It's certainly fantastic. At least it's on the high side of the BTAC allocation sizes.

I'm actually pretty excited about the potential for a fast-growing Handy allocation - being only 6yrs old, in THEORY it should be the first one that could grow substantially in supply...

I aimed higher at Stagg this year and got it, so I didn't pick up any THH, but since then I got to try it at a restaurant. Anyway, the point is I have happily attainable goals for fall 2015 and beyond.

[Harry in WashDC]

We may have some retailers in WashDC near the big hotels that bump prices a little to hit the tourist crowd, but I've only seen one case of outright gouging, and it was a THH 750. ONLY $250. I was so disgusted, I left the BT and Bernheim (one 750 of each) at the counter and told them I'd changed my mind. Never been back to that store.

[The Black Tot]

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.

I missed at least two. Angel's Envy and Brown Forman are adding stills in Louisville, all as big as the Michter's still. Read this on Chuck's blog today.

How many more big stills do we need just to get mid-shelfers like ETL and W12 back on the shelves? ...hmmm...

[garbanzobean]

All the talk of hipsters fighting over LEs is great, but that's still ignoring the situation that there are probably more on premise accounts that want these LEs than supply, and that on premise demand is relatively inflexible compared to the tickle me Elmo aspect of the LEs. That said, I see the mid and bottom shelf mostly in stock here (OWA, ETL, etc can be hard to get). Plenty of choices for me to be happy. Store selections typically linger as well.

I wish there were more high end Japanese whiskies available in my area, so people could fight over those instead of hoarding the 12/15 year olds.

Edited March 31, 2015 by garbanzobean

[ThirstyinOhio]

All the talk of hipsters fighting over LEs is great, but that's still ignoring the situation that there are probably more on premise accounts that want these LEs than supply, and that on premise demand is relatively inflexible compared to the tickle me Elmo aspect of the LEs. That said, I see the mid and bottom shelf mostly in stock here (OWA, ETL, etc can be hard to get). Plenty of choices for me to be happy. Store selections typically linger as well.

I wish there were more high end Japanese whiskies available in my area, so people could fight over those instead of hoarding the 12/15 year olds.

I agree with you Garbanzobean. Every bar/restaurant wants to have PVW/BTAC and so forth on their shelfs and a lot of these places aren't visited by hipsters.

[The Black Tot]

hahaha haven't you guys read the early thread? You're playing with fire with that h word

[garbanzobean]

hahaha haven't you guys read the early thread? You're playing with fire with that h word

I think hunting down these hipsters will be about as effective as the Salem witch trials were.

[Spade]

I agree with you Garbanzobean. Every bar/restaurant wants to have PVW/BTAC and so forth on their shelfs and a lot of these places aren't visited by hipsters.

This is my sense as well. There was actually a brief window a year or so ago when restaurants and bars first started getting these sorts of bottles and offering glasses at pretty reasonable prices, $10-$15. Went back to one a few weeks ago and was going to order a THH and it was more than $25. Got a glass of a single barrel of EC12 the restaurant had selected instead for less than $10. I also recently saw PVW 23 for $60 at a restaurant that until recently had maybe 10 whiskies on their menu, most of which were pretty standard scotches.

[miller542]

Like most booms, you don't know you're on the downward side until you're well into the downward side. All examples of the current strength of the boom posted tell me we're currently at the peak if not already starting the decline within the lower 48. International demand is a completely separate issue producers are dealing with.

Now that seemingly everyone is on the chase for every limited release and anything else dubbed "collectable" it should only be a short time until things cool off and the trend shifts somewhere else. Every market that gets over-heated eventually comes back to reality, which is good news for a lot of us.

That said, lets not forget the consumption of brown liquors was on the way back up before the boom. And more consumers now have an affinity for bourbon as a result of the boom and are likely to continue to enjoy bourbon well after the boom subsides. These increases + international markets will create a new demand curve for producers to chase for years to come. I'm sure they'll do fine, but for the next 4-8yrs, my money says we'll still experience issues with supply, pricing, and age statements in the mid-shelf range.

Edited March 31, 2015 by miller542

[dementedavenger]

Based on what I'm seeing related to Cured Oak the end is not yet in sight.