Our ongoing observations about whether the boom has peaked

[jvd99]

I'd love to see the look on the guy's face when he sees his mug on a wanted poster.  That's good stuff!

[The Black Tot]

Flahute nailed it. It's true, bunkers are filling, and people are clearing the shelves of the likes of ER10, etc...

...and in a few years their bunker will be so large that they'll say "whoa, I actually have to DRINK this stuff!", and the exact opposite will happen - sales will drop to very low rates, all at about the same time the currently ramped-up production comes online to flood the market.

I myself (as well as Flahute and others here) am down to plucking the odd store pick or limited, instead of filling the trunk a year ago.

Keep the long-term view in perspective. There's going to be a LOT of nicely-aged product for those who are prepared to wait 5, 8, or even 10yrs. Again, watch the fever-pitch rack house construction going on right now.

There is no good reason to scramble around and pay the worst prices in history right now (unless of course money doesn't matter to you, which, certainly, for some people, it doesn't). I think the time for bunkering is over, if you don't have one already. Which isn't to say don't buy multiples of the odd special bottle like a store pick that really hits you the right way. I'm just saying there's no real reason to feverishly purchase anything current-mass-production (small or large batch products). Buy singles until the pressure comes off of these brands.

Even things like ER10 are probably ten years old and a day now. In the future they may return to glut practices such as chucking some older whiskey into the blend. People say that won't happen again, but we all know what history is doomed to do. People are worried about dropping age statements, but they will return eventually. The producers know that age statements sell whiskey, and when they can bring 'em back, they know it will help sales.

Bunkering today is sort of like locking in to the flavor of the most strained stocks in history - probably at the worst prices as well, such that when the next amazing glut whiskey comes, you'll have to drink down your lesser boom whiskey, which may be worse than what's on the shelf for good prices. That doesn't make sense.

[jvd99]

That's a persuasive argument Tot

[BigPapa]

16 hours ago, The Black Tot said:

Flahute nailed it. It's true, bunkers are filling, and people are clearing the shelves of the likes of ER10, etc...

...and in a few years their bunker will be so large that they'll say "whoa, I actually have to DRINK this stuff!", and the exact opposite will happen - sales will drop to very low rates, all at about the same time the currently ramped-up production comes online to flood the market.

I myself (as well as Flahute and others here) am down to plucking the odd store pick or limited, instead of filling the trunk a year ago.

Keep the long-term view in perspective. There's going to be a LOT of nicely-aged product for those who are prepared to wait 5, 8, or even 10yrs. Again, watch the fever-pitch rack house construction going on right now.

There is no good reason to scramble around and pay the worst prices in history right now (unless of course money doesn't matter to you, which, certainly, for some people, it doesn't). I think the time for bunkering is over, if you don't have one already. Which isn't to say don't buy multiples of the odd special bottle like a store pick that really hits you the right way. I'm just saying there's no real reason to feverishly purchase anything current-mass-production (small or large batch products). Buy singles until the pressure comes off of these brands.

Even things like ER10 are probably ten years old and a day now. In the future they may return to glut practices such as chucking some older whiskey into the blend. People say that won't happen again, but we all know what history is doomed to do. People are worried about dropping age statements, but they will return eventually. The producers know that age statements sell whiskey, and when they can bring 'em back, they know it will help sales.

Bunkering today is sort of like locking in to the flavor of the most strained stocks in history - probably at the worst prices as well, such that when the next amazing glut whiskey comes, you'll have to drink down your lesser boom whiskey, which may be worse than what's on the shelf for good prices. That doesn't make sense.

Nicely said Tot. 

[PaulO]

I agree with Tot too.

In the meantime, I also blame the boutique type brands that have come up.  Some are high priced NDPs, others are extensions of major distiller's brands.  There is a big incentive for barrels to get extra aged.  This also pulls stock out of the regular supply.

I'll call my hypothesis the trident.

Younger barrels leave to go to Potemkin brands.

Other barrels don't get bottled because they are being extra aged.

Then we have all the shenanigans with consumers. 

[skiwez2]

Being relatively new to this wonderful hobby, I agree with Tot, but have a question.

 

With all this amped up production new rickhouses and distillers will the flavor profiles be maintained or will we all be drinking swill in 10 years?

[tanstaafl2]

6 minutes ago, skiwez2 said:

Being relatively new to this wonderful hobby, I agree with Tot, but have a question.

 

With all this amped up production new rickhouses and distillers will the flavor profiles be maintained or will we all be drinking swill in 10 years?

Probably won't be swill as they have been adding rickhouses for generations most of these guys have been doing this for awhile and pretty much have it down. But than again we won't really know for about, oh, 10 years!

[Harry in WashDC]

5 hours ago, skiwez2 said:

Being relatively new to this wonderful hobby, I agree with Tot, but have a question.

 

With all this amped up production new rickhouses and distillers will the flavor profiles be maintained or will we all be drinking swill in 10 years?

I've noticed shifts in profiles of particular brands over time (really long time - compare 1950s bondeds to 2015 bondeds), but the shifts weren't always bad - just "other".  Some, of course went downhill (see: IMO Jack Daniels 1970 vs. JD basic today) while others improved (see: Four Roses then vs. 4R now).   Overall, though, I'm much happier today with a wide variety of choices that weren't always there OR that I was not aware of.  For example, I picked on today's basic JD, but back then (early 1970s) things like Gentleman Jack and the other special, but-not-really-limited releases like Sinatra, etc. weren't available; to me they more than make up for my perceived change in basic JD.  I cannot imagine the Majors would screw up the bulk of their offerings now that they have a good chunk of the spirits market in hand, especially since they know how fickle the market can be.  Flavored vodka, anyone?  Not THIS round.

[flahute]

5 hours ago, skiwez2 said:

Being relatively new to this wonderful hobby, I agree with Tot, but have a question.

 

With all this amped up production new rickhouses and distillers will the flavor profiles be maintained or will we all be drinking swill in 10 years?

Well, the distillate coming off of the still will be the same quality. Ramped up production means "24/7" so to speak versus less than that prior to the boom. They aren't cutting corners with the distillation process itself. The wildcard is the new rackhouses. They know how whiskey ages on particular floors of particular rackhouses and position barrels accordingly to achieve particular profiles for particular brands. With the new rackhouses, they don't have that knowledge based on history of the rackhouse, but the principles are the same and they'll taste barrels along the way to keep tabs on things. So, no, I don't think we'll be drinking swill in 10 years.

[The Black Tot]

Definitely not swill.

I will say I wish someone was still doing wild yeasts and longer fermentations (and maybe some of the small guys ARE) with non-GMO grain, but that ship sailed a long time ago. I remember Squire mentioning something like what we gave up in the occasional awesome wild yeast batch was more than made up for with pretty much the elimination of the bummer batches where it all went wrong in the "put it in the mash tank and cross your fingers" days.

Now we have consistency - most of the new master distillers have chemistry degrees and now that the stillhouses are computerized with a sensor on everything you can stick one on, there's better quality control than ever. The stuff we're drinking and liking today is already made this way, and we love it.

I also suspect as Bruce alluded to above that the new rack houses are being constructed with everything we know how to do well from history, and then a few modern tweaks which could very plausibly expand the number of "honey ricks", getting better maturations out of the same amount of space vs the old designs. There is a LOT to look forward to.

Frankly, I think we're really going to need each other on this forum, because there will be small micro-distilleries all over the place putting out product all over the quality map - it will be too much for anyone to cover on their own.

I'm kind of giddy about the future of American whiskey. I don't mind the sh*& show we're in now, because it's what's driving the conditions for the next quality wave, which should probably last the rest of my life, anyway.

[mosugoji64]

2 hours ago, The Black Tot said:

Definitely not swill.

I will say I wish someone was still doing wild yeasts and longer fermentations (and maybe some of the small guys ARE) with non-GMO grain, but that ship sailed a long time ago. I remember Squire mentioning something like what we gave up in the occasional awesome wild yeast batch was more than made up for with pretty much the elimination of the bummer batches where it all went wrong in the "put it in the mash tank and cross your fingers" days.

Now we have consistency - most of the new master distillers have chemistry degrees and now that the stillhouses are computerized with a sensor on everything you can stick one on, there's better quality control than ever. The stuff we're drinking and liking today is already made this way, and we love it.

I also suspect as Bruce alluded to above that the new rack houses are being constructed with everything we know how to do well from history, and then a few modern tweaks which could very plausibly expand the number of "honey ricks", getting better maturations out of the same amount of space vs the old designs. There is a LOT to look forward to.

Frankly, I think we're really going to need each other on this forum, because there will be small micro-distilleries all over the place putting out product all over the quality map - it will be too much for anyone to cover on their own.

I'm kind of giddy about the future of American whiskey. I don't mind the sh*& show we're in now, because it's what's driving the conditions for the next quality wave, which should probably last the rest of my life, anyway.

Many of those variables are being explored by BT in their Warehouse X experiment. I'm hoping they get some good information out of that one. 

[b1gcountry]

Nice post tbt. I will say though, that after trying to get into whiskey 12+years ago, and it not really becoming my thing, the accessibility of the whiskey world is much better today.

The  information and resources available are really valuable (including this site, you tube reviews, phone apps, and lots of blogs.) 12 years ago I remember standing in front of the one American whiskey shelf, and the two Scotch shelves at a local, nice liquor store and feeling overwhelmed. Today, that same store has twice the Scotch, 4 shelves of bourbon, one of rye, another misc whiskey, and even separate shelves for Irish and Canadian. The stores all stock so much more product because people are drinking it. In the past, there were less options at any given store because the demand was lower. Plus today, I can stand in front of those shelves, and bring up an app on my phone that will give me a description of any bottle there in less than two minutes.

On top of that, I would go into a store with some questions, and the guy behind the counter would tell me he only knew wine. "Doug is our scotch guy, he's in the back" And even Doug didn't know much about bourbon. So I would pick up another bottle of jd or maybe a Woodford reserve, but most times, I would just pick up some beer, or he would tell me about some scotch, and I would enjoy that for the next two or three months, but never enough to run back to the store when I'm out.

So while I cannot find any Weller or BTAC or Pappy today, I definitely didn't know what those were 12 years ago, and didn't even have the resources available to me to find out

 

Edited February 27, 2016 by b1gcountry

[jvd99]

4 hours ago, mosugoji64 said:

Many of those variables are being explored by BT in their Warehouse X experiment. I'm hoping they get some good information out of that one. 

I agree with what others said above - the quality of the distillate being produced is the same, just in more quantity, and the variables that could affect quality lay with the new rackhouses and whether age stated products go the way of NAS.  However, the new rackhouses are an unknown, and even novel experiments like the BT X warehouse will not end up being the panacea they think or claim it will.  IMO it's kind of gimmicky.  I doubt BT can extrapolate any groundbreaking techniques out of a specialty built, extremely small, environmentally controlled and light controlled box and then be able to replicate those conditions on a much larger scale in a traditionally sized and traditionally built rackhouse that's subject to the unknowns of mother nature.  Even if they could, the "experiment" is not over and we would presumably have to wait for that to happen, then wait for BT to build rackhouses using the newfound "X" knowledge, populate it with barrels and then wait for it all to age according to the "X" parameters.  Who knows when that will be.

[PaulO]

I say the goal of BT's experiments is to see how much they can charge for a 375ml bottle.  

But seriously, BT had some great products in the past.  All were simply discontinued by changing age and or proof.  I'm sure they could bring them back at any time if it made economic sense, if there wasn't the whole shortage hysteria.

I'm talking about: ETL 107, ER 101, Weller Centenial, OWA 7 year, AAA 10 year, VOB 6 year, and probably others.

Edited February 28, 2016 by PaulO

[Prof_Stack]

Has the boom peaked?  Maybe.  I've relatively new to whiskey, about three years now.  The "excitement" of new (to me) flavors has passed, and now I just like a smooth bourbon or rye.  I still don't get or appreciate scotch.

Over the holiday season, I stocked up on great prices and am now set for 2016 and maybe beyond.  I'll replenish a bottle when it empties with the same or different brand.

What's now drawing my attention is the booming craft beer industry here in Seattle.  Using more types of yeast and having some beers age in secondary oak barrels makes for a lot of taste variety.

[jvd99]

I don't think those overpriced 375ml Experimental Collection bottles came out of the X Warehouse.  I could be wrong though.

[flahute]

13 minutes ago, jvd99 said:

I don't think those overpriced 375ml Experimental Collection bottles came out of the X Warehouse.  I could be wrong though.

Nothing has come out of Warehouse X yet because it's not old enough.

[smokinjoe]

On ‎2‎/‎25‎/‎2016‎ ‎4‎:‎35‎:‎31‎, The Black Tot said:

Flahute nailed it. It's true, bunkers are filling, and people are clearing the shelves of the likes of ER10, etc...

...and in a few years their bunker will be so large that they'll say "whoa, I actually have to DRINK this stuff!", and the exact opposite will happen - sales will drop to very low rates, all at about the same time the currently ramped-up production comes online to flood the market.

 

Paul, are you suggesting that your theory is partly predicated on your belief that a certain segment of people are currently buying in excess of what they can drink, and that sales of bourbon will "drop to very low rates", when these few people stop?  Thus, suggesting the bourbon boom market that we speak of here daily is literally smoke and mirrors, and not indicative of a broader appreciation of, and deeper demand for, the whiskey both here in the US, and abroad?

[Canarse]

1 hour ago, smokinjoe said:

Paul, are you suggesting that your theory is partly predicated on your belief that a certain segment of people are currently buying in excess of what they can drink, and that sales of bourbon will "drop to very low rates", when these few people stop?  Thus, suggesting the bourbon boom market that we speak of here daily is literally smoke and mirrors, and not indicative of a broader appreciation of, and deeper demand for, the whiskey both here in the US, and abroad?

A portion of every boom market is smoke and mirrors.  Speculators drive up prices along with consumers.  The jokers clearing the shelves of ER10 will get left holding the bag eventually.  On the other hand the short supply bourbons like BTAC and Pappy will continue to be rare by the producers design.  They keep supply low which drives a lot of talk.  This talk spills over to BT's other brands and you get people clearing the shelves of ER10.  The bubble will eventually burst as supply increases and demand levels off when the next big trend hits.

I have fun trying to find some of the rare bourbons, but I plan to drink them.

[smokinjoe]

I mentioned earlier in this thread that (I think it was this thread...), that a lot of what we say is the "market" and representative of the "bourbon boom", is not the market at all.  Rather, it is the Bubble that is part of the boom.  The boom is real, deep, and shows no signs of relenting.  Distilleries are doing what they can to catch up.  Whether it's too little, too late.  Or, too much, too late, remains to be seen.  Tough predicting the whiskey business.  On the other hand, the "Bubble" will surely pop, and those few who are doing all the crazy things mentioned will have to deal with that, then. 

[The Black Tot]

1 hour ago, smokinjoe said:

Paul, are you suggesting that your theory is partly predicated on your belief that a certain segment of people are currently buying in excess of what they can drink, and that sales of bourbon will "drop to very low rates", when these few people stop?  Thus, suggesting the bourbon boom market that we speak of here daily is literally smoke and mirrors, and not indicative of a broader appreciation of, and deeper demand for, the whiskey both here in the US, and abroad?

You can call it a belief, Joe. But people are still engaged in shelf clearing, we were talking about it above. Are you saying that YOUR belief is that there are only a few people bunkering? That sounds like the same kind of belief.

Where did you get smoke and mirrors from? I never said that. If people are overbuying now, building their home bars, that's not smoke and mirrors. There's nothing unreal about the boom. It's very real demand. But it's like the initial demand for a product when it's a new interest (the broader and deeper demand you mention). Eventually that settles down either when people lose their initial infatuation with it, or when they've satisfied their curiosity, or when, as we're discussing, they realize they've bought more than they needed. This is particularly relevant to the higher aged limiteds many of us are interested in here.

I have yet to see the abroad argument applied convincingly to anything but the JBW, JD, MM, and WR, which is usually all that is available abroad (I am always looking), apart from relatively small and unchanged allocations to mainland Europe and Japan. And we don't have shortage issues with those because the turnover is only 4yrs for those products, and by and large their production rises adequately to meet demand with minimal supply lag. In short, the boom isn't affecting the availability of JBW, etc, so abroad is just fine.

 

[The Black Tot]

2 minutes ago, smokinjoe said:

I mentioned earlier in this thread that (I think it was this thread...), that a lot of what we say is the "market" and representative of the "bourbon boom", is not the market at all.  Rather, it is the Bubble that is part of the boom.  The boom is real, deep, and shows no signs of relenting.  Distilleries are doing what they can to catch up.  Whether it's too little, too late.  Or, too much, too late, remains to be seen.  Tough predicting the whiskey business.  On the other hand, the "Bubble" will surely pop, and those few who are doing all the crazy things mentioned will have to deal with that, then. 

It's a little late to rename the thread "our ongoing observations about whether the BUBBLE has peaked", but clearly that's what this thread is about. That's what the peak concept is about, the bursting of the bubble, if you like.

Personally, I wouldn't call "sustainable growth", which is what you seem to be referencing with a broad increase in interest in the category, a "boom". I think booms and bubbles are the same thing. That's why we often pair the word boom with bust.

Your last sentence here basically says what we're saying.

[smokinjoe]

I know, Paul.  But, you said that when these shelf clearing people stop bunkering, "sales will drop to very low rates".   That is implying that the sales of today's boom are fueled primarily by these people bunkering, with seemingly no regard to the millions and millions of potentially new long term customers that are and will surely have bourbon as part of their spirits portfolio.  I simply reject that notion.  There are 1,000 of the latter for every 1 shelf clearing bunker builder. 

 

[The Black Tot]

For our entertainment, I'm going to come back with some numbers on this, Joe, but it might take me a day or two to put the data together. Watch this space.

[Richnimrod]

4 hours ago, The Black Tot said:

For our entertainment, I'm going to come back with some numbers on this, Joe, but it might take me a day or two to put the data together. Watch this space.

I'd be happy to sign, if the e-mail wasn't a required field.    I don't care to publish it anybody and everybody, sorry.