Our ongoing observations about whether the boom has peaked

[smokinjoe]

8 hours ago, El Vino said:

 How many would agree that the "market" for standards is in equilibrium now? In my opinion, the market for limiteds will remain tight because that is largely a function of manufactured shortages by withholding supply.

A lot depends on ones definition of "standard bottles ", I guess.  I don't think that standard bottles. were very much ever removed from a state of equilibrium, or good availability.  The "highly sought after normals" as listed by E (and others could be added to it)?  Sure, they have been dicey on availability, and continue to be overall, IMO.  I'm not sure we're at equilibrium on these, though, it seems that the market reloads after the rolling blackouts do seem to have a little more breadth and depth.

I'm not sure I understand your last sentence.  Aren't limiteds by definition supposed to be tight and a designed "manufactured shortage"?

[mbroo5880i]

1 hour ago, smokinjoe said:

A lot depends on ones definition of "standard bottles ", I guess.  I don't think that standard bottles. were very much ever removed from a state of equilibrium, or good availability.  The "highly sought after normals" as listed by E (and others could be added to it)?  Sure, they have been dicey on availability, and continue to be overall, IMO.  I'm not sure we're at equilibrium on these, though, it seems that the market reloads after the rolling blackouts do seem to have a little more breadth and depth.

I'm not sure I understand your last sentence.  Aren't limiteds by definition supposed to be tight and a designed "manufactured shortage"?

 

Yep, there never was a threat of running out of EWB, JB, WT101, or OF.  

[Clueby]

6 minutes ago, mbroo5880i said:

 

Yep, there never was a threat of running out of EWB, JB, WT101, or OF.  

Blows my mind that there are areas where regular ol Buffalo Trace is on allocation or hard to find.  It also blows my mind to see shelves full of W12, too, though. In 5 years I think I've seen one.  The regional distribution sometimes doesn't seem to make sense. I guess to some accountant somewhere it does.

[El Vino]

1 hour ago, smokinjoe said:

I'm not sure we're at equilibrium on these, though, it seems that the market reloads after the rolling blackouts do seem to have a little more breadth and depth.

I'm not sure I understand your last sentence.  Aren't limiteds by definition supposed to be tight and a designed "manufactured shortage"?

Joe:  I was trying to make a logical/statistical conclusion.  I'm sober at the moment, so this might work.  With the increase in the amount of whiskey in barrels, I am assuming that the number of barrels which would qualify (qualitatively) for the limiteds would increase by the same proportion.  So if HH increased production by 50% from pre-boom levels, than the number of barrels which would qualify for their limited releases would also increase 50%.  In order to maintain the scarcity factor of the limiteds, they might easily restrict supply to preserve the excess of demand over supply.  On the other hand, they have to pay the bills.  So the vast majority of aging stock will have to be sold at market value.  And the reality is (I assume):  they are still filling barrels at record pace.  So future supply will not go down.  If demand for non-limited releases is in equilibrium now, pricing power would seem to move to the consumer not the producer.  EV

[smokinjoe]

51 minutes ago, mbroo5880i said:

 

Yep, there never was a threat of running out of EWB, JB, WT101, or OF.  

Bingo!

[smokinjoe]

1 hour ago, El Vino said:

Joe:  I was trying to make a logical/statistical conclusion.  I'm sober at the moment, so this might work.  With the increase in the amount of whiskey in barrels, I am assuming that the number of barrels which would qualify (qualitatively) for the limiteds would increase by the same proportion.  So if HH increased production by 50% from pre-boom levels, than the number of barrels which would qualify for their limited releases would also increase 50%.  In order to maintain the scarcity factor of the limiteds, they might easily restrict supply to preserve the excess of demand over supply.  On the other hand, they have to pay the bills.  So the vast majority of aging stock will have to be sold at market value.  And the reality is (I assume):  they are still filling barrels at record pace.  So future supply will not go down.  If demand for non-limited releases is in equilibrium now, pricing power would seem to move to the consumer not the producer.  EV

You lost me at logical/statistical, EV... 

 

Sounds like we agree.  Limiteds are in fact...limited!

 

 

[mbroo5880i]

EV, I see where you coming from.  However, I would suspect that the general increase in bourbon produced compared to what is available for limited or special offerings is not linear.  They are probably doing all they can to keep up with the increased demand for standard products and branded products.  Using HH as an example, just the increased demand for EWB puts pressure on supply.  Throw in EWSB, EC, etc. and other widely distributed mid-shelvers and there is probably still a lot of pressure on availability of bourbon 4 years old or greater.  Much of today's production (meaning within the last 5 years) still doesn't qualify for limited or special offerings.

 

I know there is some thought that BT, more than other distillers, creates an artificial scarcity in certain products (limited, Weller, etc.).  I think the increased demand for these products and some of the distribution inefficiencies has exacerbated this scarcity.  Could they decide to dump X+Y barrels for next year's GTS instead of just X?  I suppose but if the availability were to increase substantially, I think this might affect quality enough to generate push back and bad publicity.  

 

While not really related to this discussion, I did hear something interesting on the radio yesterday.  One of the local sports radio talk shows hosts a Heaven Hill backyard BBQ at a listeners home each summer.  The HH rep was discussing bourbon distribution during one of the radio segments.  He indicated that currently Larceny is only distributed in 29 states but by the end of September it will be distributed in all 50 states.  He also indicated that it was intended as a rebrand of Old Fitz along with "a story."  So, obviously, wheated stock intended for Old Fitz was dedicated to Larceny, meaning it began its limited distribution roll out with aged stock.  I wonder why it took so long for nationwide distribution?

[b1gcountry]

 I wonder why it took so long for nationwide distribution?

 

"We want to bring larceny into your state"

 

I mean who is going to say yes to that? !

 

Two more things about le releases:

 

1. They take a lot of time for a matter distiller to select and find matching barrels. They can increase production, but can't clone a guy like Jim Rutledge/Elliot/Jimmy Russell.

 

2. Some products come from specific places in the Rick houses. They can't put more barrels into the same sweet spots. It may take a few years to find the sweet spots in the new buildings.

 

[Charlutz]

I don't know about the supply/demand for standards being in equilibrium. The loss of age statements on KC and EC indicates to me that people are still buying these faster than supply. I have doubts about Beam Suntory marketing strategy but I would have thought the supply of KC was never ending. Same for EC, though with all the Bulleit out there, maybe that's what strained their supply? (Excuse my ignorance if what was sold to become Bulleit was not the same whiskey in EC.)

[smokinjoe]

27 minutes ago, Charlutz said:

I don't know about the supply/demand for standards being in equilibrium. The loss of age statements on KC and EC indicates to me that people are still buying these faster than supply. I have doubts about Beam Suntory marketing strategy but I would have thought the supply of KC was never ending. Same for EC, though with all the Bulleit out there, maybe that's what strained their supply? (Excuse my ignorance if what was sold to become Bulleit was not the same whiskey in EC.)

As I stated above , it depends on how you define "standards".  I would not put KC in the standard category, as it is part of their Small Batch Collection.  And, certainly EC was a higher end standard with the 12 year AS, and they adjusted the age to meet demand and keep it on the shelves.  In general, keeping shelves stocked did not come without adjustments and some pain.

[Charlutz]

3 minutes ago, smokinjoe said:

As I stated above , it depends on how you define "standards".  I would not put KC in the standard category, as it is part of their Small Batch Collection.  And, certainly EC was a higher end standard with the 12 year AS, and they adjusted the age to meet demand and keep it on the shelves.  In general, keeping shelves stocked did not come without adjustments and some pain.

 

Agreed. I am defining 'standard' by price, call it under $30, and availability. 

Edited June 25, 2017 by Charlutz

[flahute]

50 minutes ago, Charlutz said:

Same for EC, though with all the Bulleit out there, maybe that's what strained their supply? (Excuse my ignorance if what was sold to become Bulleit was not the same whiskey in EC.)

Bulliet doesn't have any of that in the mix, never has. It's primarily Four Roses.

[flahute]

5 hours ago, b1gcountry said:

 

"We want to bring larceny into your state"

 

I mean who is going to say yes to that? !

 

Two more things about le releases:

 

1. They take a lot of time for a matter distiller to select and find matching barrels. They can increase production, but can't clone a guy like Jim Rutledge/Elliot/Jimmy Russell.

 

2. Some products come from specific places in the Rick houses. They can't put more barrels into the same sweet spots. It may take a few years to find the sweet spots in the new buildings.

 

Doesn't really work that way in this case.

The master distiller in a company that large doesn't go looking for matching barrels. There's a panel of people in Quality Control who monitor the barrels and the master distiller participates in tasting barrels they've selected to determine what's ready and on profile. Larceny is repurposed Old Fitz as you know so they already know where they go in the rickhouses. Though it will indeed take a few years to find the right spots in a new rickhouse, none of those new buildings have been online long enough for any of that distillate to be ready for anything. (And, they will also bring over partially aged barrels into the new ricks so they aren't starting from scratch.)

It's taken them this long to ramp up nationally because as a new product (that being the blend of various ages of what was Old Fitz) they didn't have enough to go national right away, and, they wanted to take time to get the blend right. They also do not want to enter a new market until they know they can support the brand consistently. At this point, they are almost there.

[El Vino]

My god, you guys are good!  Linearity be damned, I have a question. I have never been to a distillery: what percentage (approximately-wink) of a rick house would be considered a sweet spot? 

[Charlutz]

1 hour ago, flahute said:

Bulliet doesn't have any of that in the mix, never has. It's primarily Four Roses.

 

Ok. I thought I remembered reading somewhere that they were being limited in four roses purchases and sourcing from HH. My mistake. 

[BottledInBond]

14 minutes ago, El Vino said:

My god, you guys are good!  Linearity be damned, I have a question. I have never been to a distillery: what percentage (approximately-wink) of a rick house would be considered a sweet spot? 

The amount of subjectivity in answering this about makes my head explode. There is absolutely no way to apply a consistent % to this. Too many variables. Some master distillers historically have liked one whole rickhouse over another. Some have liked barrels from higher floors while some have liked barrels from lower floors, and then some rickhouses don't have multiple floors, like Four Roses. Some people like barrels that age closer to windows because they get larger swings in temperatures so the barrels pull the juice in and out of the wood slightly more, thus "aging" the whiskey slightly faster. But for older age-stated whiskey often a master distiller wants barrels from lower in a rickhouse so it won't have been exposed to the hottest temperatures and essentially aged slower so it wouldn't end up as Beaver Bourbon. It is all a combination of art and science, and that is the reason that BT hadn't been able to crack the specific code on making the "perfect bourbon" with all of their experiments and projects. 

[b1gcountry]

Doesn't really work that way in this case.
The master distiller in a company that large doesn't go looking for matching barrels. There's a panel of people in Quality Control who monitor the barrels and the master distiller participates in tasting barrels they've selected to determine what's ready and on profile. Larceny is repurposed Old Fitz as you know so they already know where they go in the rickhouses. Though it will indeed take a few years to find the right spots in a new rickhouse, none of those new buildings have been online long enough for any of that distillate to be ready for anything. (And, they will also bring over partially aged barrels into the new ricks so they aren't starting from scratch.)
It's taken them this long to ramp up nationally because as a new product (that being the blend of various ages of what was Old Fitz) they didn't have enough to go national right away, and, they wanted to take time to get the blend right. They also do not want to enter a new market until they know they can support the brand consistently. At this point, they are almost there.

I know I mentioned larceny, but the two points were about limited edition stuff...I know that wasn't super clear...

I remember an interview with JR where he said the 4R SmB LE took an inordinate amount of time

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[El Vino]

BIB - thanks for the insightful response.

[garbanzobean]

17 hours ago, smokinjoe said:

As I stated above , it depends on how you define "standards".  I would not put KC in the standard category, as it is part of their Small Batch Collection.  And, certainly EC was a higher end standard with the 12 year AS, and they adjusted the age to meet demand and keep it on the shelves.  In general, keeping shelves stocked did not come without adjustments and some pain.

Whether or not I was clear in my previous post, Joe and Charlie have brought up two perfect examples of what I'm talking about.  Adjustments have been made to the market to maintain supply of relatively affordable, excellent quality bourbon.  This came at a price.  While some prefer a younger profile and seem to enjoy the new recipes, others do not.  Others view a younger flavor profile as a quality slide.  Buffalo Trace definitely seemed like they were stretching the credibility of the OWA name a bit there for awhile, but seem to have rebounded with a strong quality increase, if my last two bottles are representative of the whole.  It could just be my changing palate, but I feel as though most bourbons I've tasted this year have gone something like this: *opens the bottle* "D@mn, this is even better than I remembered." *Looks at bottling date, finds it was bottled in late 2015-early 2017*.

 

I guess what I have been trying to say is that the industry has many issues, but it seems like its stewards are taking far better care to keep quality from bottoming out or prices from skyrocketing than the Scotch Whisky industry has.  Of course they are very different products with slightly different market segments, but I happen to be a fan of both.  I am far more worried about which of my favorite single malts will be next to be replaced by NAS wood treated instead of properly aged trash (Lore) than I am by anything going on in the bourbon industry.  Not even Kentucky Owl.  Again, this is a bit of an apples to oranges comparison once you get technical, but they are competing for my dollars at the cash register, so how they are made/age/etc only matters so much.  Brands like EC12, OWA, KC, etc losing their age statements just haven't been the total disaster that it has been in Big Malt, which says nothing of the quality slide of many still age stated standbys of the past decade.

Edited June 26, 2017 by garbanzobean

[mosugoji64]

Another thing to keep in mind is that we have a new crop of master distillers coming in who will, hopefully, be implementing their ideas on how things should proceed. We're seeing Denny Potter take over at HH, Brent Elliott at FR, looks like Eddie Russell is grooming his son for WT, and I'm certain someone is in the pipeline over at JB. While the fruits of their labor will come to bear a few years down the road, I say "hopefully" they'll implement their ideas because, while some of us may not like what they do, I think it would be a shame if they weren't allowed to pursue their own visions for the future of their respective distilleries. Their impact on the industry is yet to be seen but will be coming in the not-too-distant future. That, along with the impact of the distillers at smaller operations, makes me excited for the future of this hobby and keeps me interested in what's in the pipeline!

[Clueby]

On a tip from a fellow SBer that FR Al Young bottles had hit town at TW I beelined straight to the closest store. I got there about fifteen minutes after I found out at 1:30 but they were all out. They confirmed that another location was out, too. Said each store got 6 bottles and that at their store they sold the first 2 within 30 seconds of putting them out. Don't know if this is indicative of the boom.  As the other SBer said..its a special bottle and if you are a FR fan it's your Pappy.

I tried a nearby Friar Tucks and all the employees there said they had never even heard of it.  One of them went looking on the regular shelf for it..not even their "special case".

On the other hand, the small little store in my hometown of 2000 people was stocked full of Blanton's, ER, SJR, and CEHT..at least 6 bottles of each.

[Nm0369]

One of our largest chain stores in central IN is playing games with W12.  You need to have some dramatic story for the right to buy 1 bottle....really?  We're at the very tail end of allocation for the new release, and we only get 750ml's here.  This chain surely gets several cases...they didn't even do this with CEHT 4 grain.  This has to be trickle down "OMG PAPPIEZ" effect.  Thankfully, I have a bottle promised to me elsewhere.

[0895]

29 minutes ago, Nm0369 said:

One of our largest chain stores in central IN is playing games with W12.  You need to have some dramatic story for the right to buy 1 bottle....really?  We're at the very tail end of allocation for the new release, and we only get 750ml's here.  This chain surely gets several cases...they didn't even do this with CEHT 4 grain.  This has to be trickle down "OMG PAPPIEZ" effect.  Thankfully, I have a bottle promised to me elsewhere.

While well intentioned, this is going to fail.

The d-bags will make up anything to get bottles.

I've listened to it first hand at my locals... Stranger walks in who never shops there, but just so happened to arrive as the distributors truck was leaving....... " my blah blah family member just had something (insert semi-important life event here) happen, and a bottle of x limited release whiskey is the only thing he wants to celebrate"

[Clueby]

32 minutes ago, 0895 said:

While well intentioned, this is going to fail.

The d-bags will make up anything to get bottles.

I've listened to it first hand at my locals... Stranger walks in who never shops there, but just so happened to arrive as the distributors truck was leaving....... " my blah blah family member just had something (insert semi-important life event here) happen, and a bottle of x limited release whiskey is the only thing he wants to celebrate"

"Hey..your grandpa died four times this year!"

[0895]

1 hour ago, Clueby said:

"Hey..your grandpa died four times this year!"

LoL.

Actually, it was 5x.

 

You should sell me that GTS.

His dying wish (each time) was for me to drink Stagg on his gravesite..... Nevermind that he only ever drank brandy once a year on thanksgiving.