Our ongoing observations about whether the boom has peaked

[Richnimrod]

3 hours ago, JTaylor said:

 

That's what I think when I see people paying today's prices for ammunition. In the 90's and early 2000's there was a glut of ammo, and prices were (to me) somewhat reasonable and shooters shot away at their heart's desire, then suddenly in 2008 things dried up and prices skyrocketed. Because of the scarcity people still paid the high prices so the shelves remained empty for years. I had my (ammo) bunker full so I didn't bother buying when the prices shot up until I bought a gun of a caliber I didn't already own. Then begrudgingly I participated in the madness. When something would finally come in it got snatched up immediately even with "1 box per customer" limits. Now supply has somewhat normalized, but the prices have remained at "shortage paranoia" levels which is what I fear for bourbon. I fear the prices will never be the same again boom or bust... 

Your experience mirrors mine, JTaylor.    I have skipped chances to shoot numerous times over the last 7 or 8 years because of the ridiculous expense to replace whatever ammo I'd be expending.    Hell, I remember spending an entire day shooting .22LR costing be about $12 or $15.    Now shooting it all day would approximately equal the cost of buying another pistol.      And, I've seen only the smallest moderation in prices of ammo, and only the most common calibers.    9mm Luger has moderated a little, 30-30's have come back to earth a little, as well as 30-'06.     I too, fear Bourbon will follow a similar path.    I just hope the distilleries (not to mention distributors, shippers and retailers) invest the windfall wisely.

[Kepler]

On 12/19/2016 at 5:14 PM, smokinjoe said:

Just so my original post is clear, when I refer to the boom wall, that is a steady and sound wall built on a solid foundation of real demand and market growth.  I've long argued that the bourbon "boom" of which I describe is different from the bourbon "bubble", which is all the extracurricular crap with secondary pricing, black markets, truck chasing, proliferation of high priced fly by night NDP's, etc.  Two TOTALLY DIFFERENT things, IMO.  

They can't be separated.  It's all part of boom/bust economic situation.  Nothing new here economics wise.

[BigRich]

They can't be separated.  It's all part of boom/bust economic situation.  Nothing new here economics wise.

One is definitely a symptom of the other. With no "wall" we wouldn't be seeing the bubble.


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[smokinjoe]

3 minutes ago, BigRich said:

One is definitely a symptom of the other. With no "wall" we wouldn't be seeing the bubble.


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Absolutely agree.  

[Thig]

Apparently Fox News thinks the boom is about over.

 

http://www.foxnews.com/food-drink/2017/01/13/is-whiskey-becoming-less-popular.html

 

[Louisiana]

 

34 minutes ago, Thig said:

Apparently Fox News thinks the boom is about over.

 

http://www.foxnews.com/food-drink/2017/01/13/is-whiskey-becoming-less-popular.html

 

 

Sounds like a good "Headline" to get some views! 

 

I'm gonna right an article that reads "Pappy Van Winkle Is Available Everywhere Now". 

 

This picture will be my paragraph!

 

[jvd99]

33 minutes ago, Thig said:

Apparently Fox News thinks the boom is about over.

 

http://www.foxnews.com/food-drink/2017/01/13/is-whiskey-becoming-less-popular.html

 

Just because some guy no one's heard of is shorting MGP stock doesn't mean the next glut is around the corner.  Of course, if I knew so much about the stock market, I'd have enough money to brush my teeth with $2,000 bottles of Pappy

[Thig]

1 minute ago, jvd99 said:

Just because some guy no one's heard of is shorting MGP stock doesn't mean the next glut is around the corner.  Of course, if I knew so much about the stock market, I'd have enough money to brush my teeth with $2,000 bottles of Pappy

Right, I didn't say I believed it. I am still having too hard a time finding what I want like ECBP.

[mbroo5880i]

Indiana has a part-time legislature.  Right now, the 2017 Legislative Session is in full swing.  The other night I attended a legislative briefing and reception in Indianapolis.  This an annual event that focuses on the manufacturing sector and legislation of importance.  The event is normally very well attended and this year was no different. The event always includes a reception that allows participants and lobbyists to mingle with high level legislators and state department heads to discuss upcoming legislative issues.  Food and alcohol flow freely.  Bourbon is always served and it is always Maker's Mark.  However, I noticed something different this year.  Several lobbying groups were using bourbon to attract attention.  It is one thing to serve alcohol at an event but it is another to use full bottles as an attention grabber.  In this instance, lobbying groups were prominently displaying full bottles to attract attention to their political interests or services.  One casino lobbying group has girls dressed in '20s flapper dresses passing out cigars and visibly carrying around a bottle of "unopened" Maker's Mark.  They had several bottles on an information table.  I never saw any of the these bottles opened or given away.  Another lobbying group had several different bottles of bourbon prominently displayed on their information table to attract attention.  They were raffling them off to attendees. These weren't top tier bottles - ER, BH, 1792, Gentleman Jack.  It was clear that these groups were tying into bourbon's popularity in order to focus attention on their political interests.   It was interesting to see lobbyists use the popularity of bourbon as a attention grabber in this type of setting.  I will say that it seemed to be effective as an ice breaker.  As I talked with people, some who I know and others who I just met, the topic of bourbon came up frequently throughout the evening.   

 

I am not saying this is a predictor of a peak but it does show how completely the popularity of bourbon has become in mainstream society.  

Edited January 14, 2017 by mbroo5880i

[mosugoji64]

9 hours ago, mbroo5880i said:

Indiana has a part-time legislature.  Right now, the 2017 Legislative Session is in full swing.  The other night I attended a legislative briefing and reception in Indianapolis.  This an annual event that focuses on the manufacturing sector and legislation of importance.  The event is normally very well attended and this year was no different. The event always includes a reception that allows participants and lobbyists to mingle with high level legislators and state department heads to discuss upcoming legislative issues.  Food and alcohol flow freely.  Bourbon is always served and it is always Maker's Mark.  However, I noticed something different this year.  Several lobbying groups were using bourbon to attract attention.  It is one thing to serve alcohol at an event but it is another to use full bottles as an attention grabber.  In this instance, lobbying groups were prominently displaying full bottles to attract attention to their political interests or services.  One casino lobbying group has girls dressed in '20s flapper dresses passing out cigars and visibly carrying around a bottle of "unopened" Maker's Mark.  They had several bottles on an information table.  I never saw any of the these bottles opened or given away.  Another lobbying group had several different bottles of bourbon prominently displayed on their information table to attract attention.  They were raffling them off to attendees. These weren't top tier bottles - ER, BH, 1792, Gentleman Jack.  It was clear that these groups were tying into bourbon's popularity in order to focus attention on their political interests.   It was interesting to see lobbyists use the popularity of bourbon as a attention grabber in this type of setting.  I will say that it seemed to be effective as an ice breaker.  As I talked with people, some who I know and others who I just met, the topic of bourbon came up frequently throughout the evening.   

 

I am not saying this is a predictor of a peak but it does show how completely the popularity of bourbon has become in mainstream society.  

 

Once the old folks get hip to it, it's on the downslope 

[PaulO]

It would be really cool to show off all the Indiana made bourbon and rye brands sourced from MGP! 

[smokinjoe]

As usual, Chuck remains a calm voice through the noise.

 

http://chuckcowdery.blogspot.com/2017/01/mgp-is-not-doomed-nor-is-american.html?m=1

[Vosgar]

38 minutes ago, smokinjoe said:

As usual, Chuck remains a calm voice through the noise.

 

http://chuckcowdery.blogspot.com/2017/01/mgp-is-not-doomed-nor-is-american.html?m=1

 

Agree 100%, especially his last statement:

 

I continue to stand by what I have said for years. If China and India develop as many have predicted, no one will have made enough. If they don’t, everyone will have made too much.

[musekatcher]

15 minutes ago, smokinjoe said:

As usual, Chuck remains a calm voice through the noise.

 

http://chuckcowdery.blogspot.com/2017/01/mgp-is-not-doomed-nor-is-american.html?m=1

 

Good article.   I've thought about offshore markets.  Jack Daniels is everywhere, in every bar thru-out the world now, as the token "American" selection.  I tried to get some friends in Europe interested in other whiskey and bourbon, and they seemed confused - the best is Jack Daniels, right?  One group actually were investors in a new whiskey start-up, but were skeptical there was any point beyond JD - its the standard to these folks because its now part of Americana.  Its not about oak and leather, caramel vs banana, balance of sweetness with burn - its about BBQ, Charlie Daniels, Levis, Harley Davidson, Fender and F150s, all best accessorized with JD.   So I'm skeptical this bourbon boom goes beyond its current market. 

 

As far as our domestic market, I think the bourbon boom is part of a larger desire to celebrate "American".  I've noticed other trends that support this, and I also see a trend towards machismo in sports, dress, etc.  And whiskey, especially bourbon goes there well.  Who knows when or if that will swing back the other way. 

 

The top shelf stuff may continue to hold its market, and they will make plenty more high dollar stuff, because its much more profitable, obviously.  I think the endangered specie is the PQRs - 100 proof, 6 year straight bourbon under $25, and so on.  I think we are seeing the last of that.  I also think it will all line up with proof and age, allowing folks to rationalize the price point, and it will mirror Scotch in cost per bottle. 

[smokinjoe]

Globally speaking, as the American whiskey industry becomes more and more part of the global spirits companies portfolios (Kirin, Suntory, Campari, Diageo, etc,), along with the already established global reach of Brown-Forman (your JD example is relevant here), and Sazerac's expanding distribution worldwide, many more areas of the world will be exposed to and supported with a supply of American bourbons and ryes.  Some for the first time .  Global Markets are being opened and fulfilled every day, that simply were not possible in the past.  American whiskey will continue to gain shelf space in those areas, which will undoubtedly result in growth there. How much growth, certainly remains to he seen, but the opportunity is substantial.  These global companies are savvy enough to not care which type of whiskey sells in these places (Scotch, Irish, Canadian, Japanese, American, etc), as long as it's theirs.  They'll make sure all are represented, and fully marketed accordingly.  

 

Relatedly, I wonder what is in store for Heaven Hill, and what their plans are.   The options, offers, opportunities, and fears, must be staggering.

Edited January 14, 2017 by smokinjoe

[KyleCBreese]

A lot of these new distilleries utilize MGP to get started and continue to source their whiskey (i.e. Smooth Ambler), so it seems like MGP has more opportunities with new distilleries opening. 

[mbroo5880i]

The global proliferation of bourbon and other American spirits (e.g., rye) continues and will continue to be a concern with respect to supply and demand.  As Joe points out, ownership of american distilleries by foreign conglomerates and the expanding wealth in emerging global markets will continue to pressure supply and demand.  This "bull market" for bourbon and American spirits may be different than previous bull markets due to changing global factors.  Of course, a total financial collapse in markets like China are a real possibility and that would change everything.

[The Black Tot]

Getting the "it" whiskeys and even the "it" other spirits has been getting palpably harder and more expensive every 6mo for years now.

 

Getting some of the classic limiteds and the dreaded PVW has become more like a job or an unpleasant ass-kissing campaign in most markets. I opted out this year. A lot of people here did, choosing instead to find a nice store select or even a regular lower shelf product and concentrate on the great experience of enjoying the bourbon to hand. The Weller 12...sorry, hard to get now. I meant the OWA...oops, allocated - The Elmer T L.... dammit, well, there's always Book.... ah, crap. Well, just pick up a 13yr 4R store select. I mean a 12yr...11...10... well, 9 years and change. Maybe an SAOS private barrel...oh yeah, they just announced those are not happening in the near future.... What were we talking about again?

 

I love reading the stories about the shop that people have patronized for 10yrs+ where the owner holds them a bottle at MSRP regardless. That's heartwarming and my hat goes off to those retailers. But every year a few more retailers defect to ransom pricing, and bars and restaurants muscle in harder and harder for an ever-increasing slice of the pie.

 

It's all rising pressure - a shrinking iceberg of success. Less and less fun.

 

I remember Julian VW talking about how he didn't want to grow PVW inventory at a high rate in the face of success because "Then they legalize weed, and I'm left with rackhouses full of whiskey that I can't sell". 25% of America now has access to legal weed, and if it follows its recent trend, in 5-10 yrs that figure could easily be closer to 50% or 60%.

 

We talk about America's rising education and experience with whiskey, but major sales trends are more about fashion. The next generation might not care at all about whiskey - we could see another 60's "That's an OLD person's drink!" reaction. We like to think it's because America is finally getting it regarding flavor, etc - but really it's more that whiskey quickly became fashionable and cool, after not being so for a very long time. It was well made and tasted awesome the whole time.

 

The more whiskey costs and the harder it is to get, the more incentive there will be to alight the train and find the next big thing. Fashion is neither patient nor forgiving - it's not going to wait 5 more years for the barrels to catch up. It's still fun to put on the 5 O'clock news how people have lined up for PVW, which in turn fans the flames of the mystique, etc. In a few years the editors might decide that's not news anymore. I'm sure they're already considering the concept tiresome. That Fox article the other day starting rumors that whiskey might be on the way out. Totally wrong - but that's the only direction you can go to be exciting (controversial/edgy/clickbaity pick your term) now in the news. I took that to mean that PAPPY HYPE NEWS ISN'T SELLING ANYMORE. THE NEWS IS ALREADY TRYING TO FIND THE NEXT BIG THING. I think that Fox article could be the early drum beat of media's turn. We all love Chuck's blog, but he can't fight the tide of the Foxes or the CNNs.

 

Maybe next month Anthony Bourdain gives a Cognac a perfect score. Or craft sake becomes the thing.

 

Anyone who has read this thread far enough back will know that this bubble has already gone WAY further than I thought it would. I've given up guessing when the bubble will burst. But I have not given up my faith that this is indeed a bubble we're living through, pop culture has whipped it good, and it's frothing at the mouth. Every month I read something that amazes me about what new length it's gone to. I still try for the odd limited but not nearly the way I used to, and it doesn't bother me if I don't succeed.

 

It's been interesting to live through this period, and it will also be interesting to see what happens when the bubble bursts. The secondary will be the canary in the coal mine. I've just ordered about 15lbs of fancy gourmet popping corn (Riehle's Select, Sunburst, for anyone who is interested. If you love your popcorn, you're welcome!), I'm ready!

 

Edited January 20, 2017 by The Black Tot

[Whiskey Dick]

many of us could see prohibition com back and be set for life.......i dont care all that much.

[The Black Tot]

6 minutes ago, Whiskey Dick said:

many of us could see prohibition com back and be set for life.......i dont care all that much.

 

Haha, totally!

 

I wouldn't say I don't care, but I can certainly afford to wait for the cycle to get back to the low end of the sine wave.

Edited January 20, 2017 by The Black Tot

[KyleCBreese]

Saw a few things on social media that lead me to believe the boom is nowhere near the end...

Saw someone excited to "score" ORVW10 for $270 and saw multiple posts of people look to trade ordinary bottles, like the most recent Barrell batch. 

[garbanzobean]

Michter's Celebration is on sale at my local Total Wine for $4999 in case anyone wants to get in on that.

 

Incidentally, I joined the Willett group on Facebook just to see if the SB.com characterization was accurate.  If anything, it was generous.  60/39.9/.1 bottle porn/illegal resale/tasting notes.  I don't know how many of you watched the American version of The Office, but it feels like being in a room full of Dwight Schrutes in full on Christmas "it" toy resale mode.  These people could and probably have ruined baseball cards, Pokemon, classic cars, motorcycles, cigars, and anything else that others are passionate about collecting out of genuine enjoyment of the hobby.

[The Black Tot]

Haha, great review!

 

The only good thing  about the cult of Willett is that they're doing a great job of delivering historically unprecedented margins to a family run, producer-made-good (NDP to self-distilling) - funding a whole lot of great (from early reviews of the young stuff) distillate which we'll be able to buy, properly aged, when Glut 2.0 happens.

 

To Willett's great credit they were a leader in the "come and pick a crazy-aged barrel at cask strength" concept - not that I was fast enough to get in on one  I'm hoping those days will return down the trail when the markets cool off.

 

I'm not so keen on the themed hotel/wedding grotto thing they're looking at doing - would rather see another rackhouse every time - but it's the old man's dream, so power to him I guess.

 

Anyway, hopefully at $500+ a bottle they'll have the spare change for another rackhouse or two. The more, the merrier!

Edited February 1, 2017 by The Black Tot

[flahute]

I'm in that group and Bean's description is accurate. 

[jvd99]

I'm in the "only buy at retail group."  Right now, my club has 1 member and everyone is super cool.