Our ongoing observations about whether the boom has peaked

[Nm0369]

Once you've had a single barrel OWA you'll be less excited about W12.  I do enjoy W12...it's a one trick pony though.  The last bottle of regular OWA I had was kind of a hot mess

[smokinjoe]

In general, I find OWA and W12, though from the same DNA, to be total opposites of each other.  The age and proof difference does not lead to a linear progression from the one to the other.  They have become two separate animals.  OWA is a much bigger whiskey due to its proof, and has more traditional thick juicy caramel and sweet burnt sugar notes.  The extra 6-7 years in the barrel for the 12 year softens much of the sweetness, and brings upon a more dry and woody/tannins quality.  It drinks thinner, though this would not be a knock against it, but just an observation.  I feel that any "quality" difference statement should take into account these differences along with personal preferences for each ones profile.  

 

Personally, I prefer OWA by a wide margin, as I like the viscosity and seeetness, while W12 many times overdoes the wood aspect to the point of becoming astringent and sooty.  

[Kane]

Interesting. Granted I never had any OWA special picks, so I pass judgement based on the regular release. Granted2, I prefer Lot B over ORVW by a large margin too, so that says something about my leanings.

 

Is there any semi-official info on OWA's age, or was that a conservative guess based on the 'straight' designation only?

[Bob_Loblaw]

This topic is a fantastic read, albeit all over the place.  Here are some of my thoughts on the boom itself and two of the more widely discussed issues: pricing and availability.

 

I think the boom is not even close to be being over.  That said, the days of flippers being able to cherry pick large numbers of the valuable bottles is largely gone as retailers are becoming more savvy and realizing that they are better served rewarding regular customers.  Also, manufacturers have realized there is additional profit to be made so MSRPs are increasing.  OFBB is a good example of this going from $35-40 to $80 plus now.  4R also bumping up prices as Al Young was $140-150.  Even BTAC (still a steal) s up from $70 to $90.  IMO The floor price is getting higher and the ceiling is getting lower.  

 

Regarding pricing, and again using OFBB as an example, I have read a lot of posts saying they will not purchase more until price drops.  I just do not see that happening ever.  I would be surprised if anyone here found a bottle in the wild at $80 without some type of heads up or connection from their liquor store.  These bottles came and went without 99% of the general public even aware of their existence.  I would imagine pretty much the same results even at 5x current production.  For those who got prior years at $40 I am indeed jealous, you got a fantastic deal.  Prices go up, not down over time.  And there are still plenty of people who will snap as many bottles as they can at the current price.

 

Availability is linked to price for me.  I  do not think we will see a time when a product like W12 is stilling on the shelves again.  UNLESS the price creeps up into the $50-60 range putting it on par with 12 year scotch's.  Part of the great appeal to bottles like W12 and EC12 was not simply the age, but the incredible value these bourbons provided in the mid $20's.  IMHO BT could increase production 10x and if price stays in the $30 range it will continue to fly off the shelves.  However, I do think we will see more of these products become available on a regular basis and the frenzy will slow.  Also, I could see production increasing enough to kill the secondary market for normal allocated items like W12; W107; ETL; RHF etc . . . and these bourbons will be closer to Blanton's.  Occasionally hard to find, but not worth buying for flippers. 

 

Speaking of Blanton's an interesting note to me is that production probably cannot increase very much.  If I recall correctly part of Blanton's shtick is that all of the barrels come from the "center cut" of Warehouse H.  So there is a finite amount that can ever be produced.  Is it possible for a reversal in scarcity down the road when the other products production becomes greater than Blanton's? 

 

One last thought.  Bourbon has to be aged in new white oak barrels yes?  They cannot be re-used?  With every distiller significantly ramping up production and all the new craft distillers will we reach a point where there is a shortage of new white oak barrels?

[smokinjoe]

15 minutes ago, Kane said:

Interesting. Granted I never had any OWA special picks, so I pass judgement based on the regular release. Granted2, I prefer Lot B over ORVW by a large margin too, so that says something about my leanings.

 

Is there any semi-official info on OWA's age, or was that a conservative guess based on the 'straight' designation only?

My opinions are based primarily on regular releases, too.  It really does come down to personal preferences, as usual.  

 

Age was guess based based on not much more than second hand info.  Though my numbers reflect an age of 5-6 for OWA, I'm guessing more the mid to upper range in there.  I wouldn't be surprised if nothing under 6, really.

[kevinbrink]

21 minutes ago, Kane said:

Interesting. Granted I never had any OWA special picks, so I pass judgement based on the regular release. Granted2, I prefer Lot B over ORVW by a large margin too, so that says something about my leanings.

 

Is there any semi-official info on OWA's age, or was that a conservative guess based on the 'straight' designation only?

Wow, I'm not sure I know anyone else who shares that particular preference, cheers to you

[kevinbrink]

11 minutes ago, Bob_Loblaw said:

This topic is a fantastic read, albeit all over the place.  Here are some of my thoughts on the boom itself and two of the more widely discussed issues: pricing and availability.

 

I think the boom is not even close to be being over.  That said, the days of flippers being able to cherry pick large numbers of the valuable bottles is largely gone as retailers are becoming more savvy and realizing that they are better served rewarding regular customers.  Also, manufacturers have realized there is additional profit to be made so MSRPs are increasing.  OFBB is a good example of this going from $35-40 to $80 plus now.  4R also bumping up prices as Al Young was $140-150.  Even BTAC (still a steal) s up from $70 to $90.  IMO The floor price is getting higher and the ceiling is getting lower.  

 

Regarding pricing, and again using OFBB as an example, I have read a lot of posts saying they will not purchase more until price drops.  I just do not see that happening ever.  I would be surprised if anyone here found a bottle in the wild at $80 without some type of heads up or connection from their liquor store.  These bottles came and went without 99% of the general public even aware of their existence.  I would imagine pretty much the same results even at 5x current production.  For those who got prior years at $40 I am indeed jealous, you got a fantastic deal.  Prices go up, not down over time.  And there are still plenty of people who will snap as many bottles as they can at the current price.

 

Availability is linked to price for me.  I  do not think we will see a time when a product like W12 is stilling on the shelves again.  UNLESS the price creeps up into the $50-60 range putting it on par with 12 year scotch's.  Part of the great appeal to bottles like W12 and EC12 was not simply the age, but the incredible value these bourbons provided in the mid $20's.  IMHO BT could increase production 10x and if price stays in the $30 range it will continue to fly off the shelves.  However, I do think we will see more of these products become available on a regular basis and the frenzy will slow.  Also, I could see production increasing enough to kill the secondary market for normal allocated items like W12; W107; ETL; RHF etc . . . and these bourbons will be closer to Blanton's.  Occasionally hard to find, but not worth buying for flippers. 

 

Speaking of Blanton's an interesting note to me is that production probably cannot increase very much.  If I recall correctly part of Blanton's shtick is that all of the barrels come from the "center cut" of Warehouse H.  So there is a finite amount that can ever be produced.  Is it possible for a reversal in scarcity down the road when the other products production becomes greater than Blanton's? 

 

One last thought.  Bourbon has to be aged in new white oak barrels yes?  They cannot be re-used?  With every distiller significantly ramping up production and all the new craft distillers will we reach a point where there is a shortage of new white oak barrels?

Bourbon can't be aged in used Oak even if it has been re-charred. My understanding is more stress is on the cooperages themselves than the actual supply of Oak.  My recollection of an interview I heard with Independent Stave was that the amount of American Oak used for barrels was a drop in the bucket compared to Furniture and Construction.

[The Black Tot]

1 hour ago, Bob_Loblaw said:

This topic is a fantastic read, albeit all over the place.  Here are some of my thoughts on the boom itself and two of the more widely discussed issues: pricing and availability.

 

Flippers are doing just fine. More liquor store owners have realized they are better served by charging secondary prices directly, than are willing to charitably hold them for their regulars. Frankly I think a lot of the flippers ARE liquor store owners, their internet savvy children, employees or others connected to the business.

 

There is not a barrel shortage. The cooperages scaled up too, and the forests are fine. We are at peak production and things are holding just fine.

 

"That won't happen ever" type statements completely ignore history, and economics. We have had gluts before, and we're going to have them again. Fashion never stays in one place, and the bubble is due to whiskey being in fashion. There is an organic growth in real appreciation, but when something else gets cool, a significant number of people will drop the category and do what's next.

 

Supply and Demand are not unrelated. The supply (production) is being cranked to unprecedented levels. You are saying this demand is such that no amount of supply will ever satisfy it. That's just not the way it works. I'm sure they thought something like that before the last glut.

 

W12 is not a unicorn. It's a good bourbon with an age statement that got hyped, and now people are bunker building. Wellers aren't being DRANK at the rate at which they're being produced, they are being HOARDED. People are anxious that because they can't find it, it must be the nectar of the gods. And then someone posts that they love it and it fans the flames, and the anxiety multiplies...

 

Look at RHF. 3yrs ago that was "the curiously marketed bourbon with the horse on the bottle., for some reason" Now someone on the internet said you're missing out if you haven't tried it, and now it's flip bait, and everyone's falling for it. I bought a six case 3 years ago when nobody cared, and it will last me until nobody cares again.

 

I work on ships. Sometimes I'm on a boat where the supply runs are managed badly, and some popular snack items only last about half way to the next scheduled supply boat. What happens? Food hoarding. How does this play out?

 

First, the popular snack item is seen almost never. It disappears ON supply boat day, instead of two weeks later when it would be naturally consumed. The same quantity of it is still on board, but it's stashed away in people's cabins. Management's response is usually to say "don't hoard food", which nobody is going to obey because management screwed up the regular supply in the first place and now the crew have taken matters into their own hands.

 

If management wants to fix it, there's only one way. They need to keep supplying the snack items in higher quantity until the crew's stashes reach a point where they feel like they are not at risk of running out. At this stage, the anxiety that caused the hoarding is relieved, there is no longer an incentive to hoard the item, and it reappears in the common areas and stays there.

 

ETL, Weller, now RHF, ECBP...to a lesser extent Blanton's - These bourbons have been at the hoard stage for a few years now. When people see a delivery there's a feeding frenzy. But the people who bought 5 bottles aren't going to drink them this week. There will come a time when they say "I've got 12 of these in reserve, I don't need another". Suddenly every new Weller delivery has three cases more for everyone else to buy. Soon after, it's back on the shelf.

 

Weller production is way up, and OWA, being among the youngest of the family, is finally starting to increase at the retail level. But you never see it. The gut reaction is to say "no amount of supply can satisfy the market!" But that is not the case, what is happening is that people are buying at faster rates than they are drinking in order to prevent their own personal shortages. They're hoarding. Bunkering up. We see this in the What did you buy today thread almost every day now. We can say the general public isn't like SB.com membership - not everyone does this - but you only need a few case buying bunker builders or amateur flippers per store (or even per AREA) to clear the shelves and create a false perception of consumption rates. How often do we read here about people driving out of state to shelf clear? And power to them! 

 

I haven't bought a Weller in about 2years, and that's because that one was a store pick. before that it's closer to 4 years. My bunker inventory is satisfactory. When everyone who wants to bunker can say that, the product is back on shelves.

 

When the recent Weller production rates get up to 12yrs of age, W12 will start showing up with greater frequency, and for a while it will still appear scarce while bunkers fill. It's not rocket science. It's just patience, which the present market is not good at.  Anxiety whips up much faster than it settles down.

 

There is always going to be something good to drink at a fair price in the USA. If you want better pricing, stop yelling "shut up and take my money!" to retailers.

[Charlutz]

35 minutes ago, The Black Tot said:

amateur flippers

Great read and healthy dose of much needed perspective. I did have to stop at this phrase though... one of the problems with the hobby is that anyone who flips is instantly a professional. If they kept their amateur status and flipped for free, we'd be golden.

Edited October 16, 2017 by Charlutz
Effing autocorrect

[The Black Tot]

Just now, Charlutz said:

Great read and healthy dose of much needed perspective. I did have to stop at this phrase though... one of the problems with the hobby is that anyone who flips is instantly a professional. If they kept their amateur bottles and flipped for free, we'd be golden.

Thanks. The post was already too long to expand on that, but what I meant was flippers who run around buying 12 cases of mid-shelf bourbons and selling them at a $10 profit per bottle as opposed to connected experienced flippers for whom those margins would not be worth their time or effort. It's mainly the $10 boys who clear the shelves of the bourbons I mentioned above, alongside the bunker builders.

[LongGone]

23 minutes ago, The Black Tot said:

Thanks. The post was already too long to expand on that, but what I meant was flippers who run around buying 12 cases of mid-shelf bourbons and selling them at a $10 profit per bottle as opposed to connected experienced flippers for whom those margins would not be worth their time or effort. It's mainly the $10 boys who clear the shelves of the bourbons I mentioned above, alongside the bunker builders.

Very good read there TBT - thanks for sharing. The real question I have at this point is what are the Weller's, RHF, and ETL's of the snack market on your ships. Also, is there a secondary snack market on these ships? There has to be right? I appreciate the insight.

[lcpfratn]

Excellent write up Paul! I agree with 100% of it.

A similar bubble occurred in the gun and ammunition industry after the school shooting in Connecticut, and the bubble is just now bursting. You couldn't find .22LR ammunition for years after that massacre because everything was bought up as soon as it came off the truck. The gun industry also ramped up production last year assuming Hillary would win the Presidential election. That, combined with the decline in the gun control threat give Republican control of Congress and the Presidency has eased the demand side of things and now almost every new gun is on sale at prices not seen for probably 10 years. If gun control seriously takes hold after the latest massacre in Las Vegas, you may see another run up in gun sales and ammo shortages, but for now it's still a buyers market. As you so eloquently stated in your treatise, a similar supply/demand flip will eventually occur in the bourbon market as well.


Sent from my iPad using Tapatalk

[fishnbowljoe]

4 hours ago, smokinjoe said:

In general, I find OWA and W12, though from the same DNA, to be total opposites of each other.  The age and proof difference does not lead to a linear progression from the one to the other.  They have become two separate animals.  OWA is a much bigger whiskey due to its proof, and has more traditional thick juicy caramel and sweet burnt sugar notes.  The extra 6-7 years in the barrel for the 12 year softens much of the sweetness, and brings upon a more dry and woody/tannins quality.  It drinks thinner, though this would not be a knock against it, but just an observation.  I feel that any "quality" difference statement should take into account these differences along with personal preferences for each ones profile.  

 

Personally, I prefer OWA by a wide margin, as I like the viscosity and seeetness, while W12 many times overdoes the wood aspect to the point of becoming astringent and sooty.  

Well put Joe. I agree. Weller 12 used to be my favorite, but I now prefer OWA. Not by much though. 

 

Cheers! Joe 

[HoustonNit]

Well put Joe. I agree. Weller 12 used to be my favorite, but I now prefer OWA. Not by much though. [emoji5]
 
Cheers! Joe 

It's weird I'd say W12 is better than OWA but if I could only have one my shelf it would be OWA.

[The Black Tot]

2 hours ago, LongGone said:

Very good read there TBT - thanks for sharing. The real question I have at this point is what are the Weller's, RHF, and ETL's of the snack market on your ships. Also, is there a secondary snack market on these ships? There has to be right? I appreciate the insight.

Junk food, basically. Chips, soda, chocolate bars, nuts.

 

Not much of a secondary market because to admit you have the stuff in the first place is to openly admit you've screwed your fellow crew members. Basically the captain would just confiscate your "bunker", because it was never yours to take (in that quantity) in the first place.

 

It sounds like base currency and it is, but when you can't get your own (there is no alcohol allowed on board and you can't go to the store,) these things start to take on an exaggerated importance - kind of like the bourbons we've been discussing...

Edited October 17, 2017 by The Black Tot

[Patrick_OKC]

In 1984, Schenley Industries moved its headquarters from NYC to Dallas. I was with Deloitte in Dallas, and we were the audit firm for Schenley. I was assigned to Schenley as the audit manager, and didn't know squat about bourbon. If I only was a bit more worldly at the time, I would have stocked up on their output. Jeez. 

[flahute]

10 hours ago, smokinjoe said:

In general, I find OWA and W12, though from the same DNA, to be total opposites of each other.  The age and proof difference does not lead to a linear progression from the one to the other.  They have become two separate animals.  OWA is a much bigger whiskey due to its proof, and has more traditional thick juicy caramel and sweet burnt sugar notes.  The extra 6-7 years in the barrel for the 12 year softens much of the sweetness, and brings upon a more dry and woody/tannins quality.  It drinks thinner, though this would not be a knock against it, but just an observation.  I feel that any "quality" difference statement should take into account these differences along with personal preferences for each ones profile.  

 

Personally, I prefer OWA by a wide margin, as I like the viscosity and seeetness, while W12 many times overdoes the wood aspect to the point of becoming astringent and sooty.  

You will not be surprised at all to learn that this is also how I evaluate the Wellers in question.

[BottledInBond]

A local store in my area had a bourbon tasting even that also included a lottery drawing for the right to purchase some bottles. There were some decent bottles included, however the fact that they though this stuff was worth advertising as lottery bottles tells me that the boom either hasn't peaked yet, or at least is still at the peak and hasn't started dropping off yet...... 

 

 

[Bob_Loblaw]

21 hours ago, The Black Tot said:

Flippers are doing just fine. More liquor store owners have realized they are better served by charging secondary prices directly, than are willing to charitably hold them for their regulars. Frankly I think a lot of the flippers ARE liquor store owners, their internet savvy children, employees or others connected to the business.

 

All good info and I hope you are in fact correct in your predictions regarding future supply.  I mostly  shop at larger chains that have made it a point of emphasis to get the limited bottles into the hands on the regular customers.  I have several lines in the water and based on how things go with the BTAC/Pappy will re-evaluate which stores will get my business in the upcoming year.   I agree that a lot of the "flippers" are probably affiliated with the individual store owners in some way.

 

I am also in a market that just saw its first shipment of W12 in over 2 years so there is probably a little unicorn status bias from me.  I still think that it will not sit on shelves if price remains in the $25-30 range.  Yes, there will be much less bunkering, but I would also think consumption rates will go way up.  If readily available at current pricing I know I would  add it to my daily drinking list and it would also spring to the top of my favorite bottle to gift and or take to parties.  

 

[DCFan]

On 10/15/2017 at 8:41 PM, Richnimrod said:

Hmmm. Wow!   You, sir, are wrong on pretty much all of this.... IMHO.    You're calling single malt scotch a 'craft' offering?   Huh?

Catching up with some old posts. Single malts are crafts (micro) in the sense that they produce a fraction of what the big boys produce. I don't view start up dates as the defining characteristic of a craft/micro but production levels. (mindfact to me  )

[DCFan]

On 10/15/2017 at 8:41 PM, Richnimrod said:

As far as Weller brands 'missing the boom'; I'm not sure how you arrive at that conclusion.    If Weller brands were languishing on store shelves, perhaps I'd agree; but the opposite is true, as far as I can tell.

If Weller had the product on the shelves they'd be making a lot more sales than they are now.  There's a nationwide hunt on for Wellers and it isn't there. Hence they've missed the boom and this glut that Tot predicts won't take place for years to come. (I see you're from Detroit, you must've worked in the auto industry if this economic fact escapes you.) No smiley face for you. 

[DCFan]

On 10/16/2017 at 4:29 PM, The Black Tot said:

W12 is not a unicorn. It's a good bourbon with an age statement that got hyped, and now people are bunker building. Wellers aren't being DRANK at the rate at which they're being produced, they are being HOARDED. People are anxious that because they can't find it, it must be the nectar of the gods. And then someone posts that they love it and it fans the flames, and the anxiety multiplies...

 

Weller production is way up, and OWA, being among the youngest of the family, is finally starting to increase at the retail level. But you never see it. The gut reaction is to say "no amount of supply can satisfy the market!" But that is not the case, what is happening is that people are buying at faster rates than they are drinking in order to prevent their own personal shortages. They're hoarding. Bunkering up. We see this in the What did you buy today thread almost every day now. We can say the general public isn't like SB.com membership - not everyone does this - but you only need a few case buying bunker builders or amateur flippers per store (or even per AREA) to clear the shelves and create a false perception of consumption rates. How often do we read here about people driving out of state to shelf clear? And power to them! 

 

Admiral, this is the kind of spot on analysis that one would expect from an Annapolis man such as yourself. Well stated sir!

 

But having said that I will have to call for a captain's mast on some of this. This mans Navy can't tolerate scuttlebutt. Loose lips and that all that rot. 

 

Yes hoarders are a huge problem and bring most of this on themselves.  A good part of it is fueled by social media and internet message boards such as this site.  And it's why I state emphatically that I abhor hoarders. The pics that are posted here of the huge hauls are the equivalent of animal heads in someones trophy room. I liked your mentioning of secondary sales by LS owners and family members. But then again they are in the business of making money and the internet is helping to make that dream come true.  (Bezos anyone?  )

 

And who said that no amount of supply can satisfy the market? That doesn't make sense on any level except by someone who's had 1 too many store picks. 

 

But anyways smooth sailing Mister and I'll tell you my bourbon story to add to the Weller mystique at another time.  (8 bells work for you?  )

[Harry in WashDC]

On ‎10‎/‎15‎/‎2017 at 8:53 PM, Paddy said:

....as I currently sip on an old, screw cap, PS KCSB from '13.

 

I (probably not for one), wish KC would go back to the screw cap.  Easier open/pour/close, and no worries about cork taint/failure.

You put the cork back IN?  How do you get the bourbon out?  All that extra work . . .

[Charlutz]

8 hours ago, DCFan said:

If Weller had the product on the shelves they'd be making a lot more sales than they are now.  There's a nationwide hunt on for Wellers and it isn't there. Hence they've missed the boom and this glut that Tot predicts won't take place for years to come. 

I take your point and restricted to Weller it has some merit. In my mind though, the scarcity of W12 and OWA has also contributed to the demand for all things BT - ER, RHF, ETL, regular BT, WSR, Blanton's, EHT, etc. Only Stagg Jr. seems to have escaped (thankfully). BT didn't miss the boom. Everything they make gets sold, they make a LOT, and their retail prices are fair. Sure, they could have gouged for W12 but I am thankful they didn't. 

[Clueby]

15 minutes ago, Charlutz said:

I take your point and restricted to Weller it has some merit. In my mind though, the scarcity of W12 and OWA has also contributed to the demand for all things BT - ER, RHF, ETL, regular BT, WSR, Blanton's, EHT, etc. Only Stagg Jr. seems to have escaped (thankfully). BT didn't miss the boom. Everything they make gets sold, they make a LOT, and their retail prices are fair. Sure, they could have gouged for W12 but I am thankful they didn't. 

BT hasn't gouged but retailers in this market continue to do so. The last OWA I saw was $99 and W12 was $199 just last week.  OWA and W12 still don't see the light of day here on a shelf.  I think we are still a couple years away from limited to regular availability. And what you said about Stagg Jr. doesn't necessarily translate to every market either.  You probably won't find a bottle in the St. Louis market.  It has shown with more regularity over the last 6 months however.