The Black Tot Posted March 1, 2016 Share Posted March 1, 2016 Haha, hang on Bruce, let me finish! Yes, it's based on what the bottles cost. No, I didn't investigate the thresholds, but they're the DISCUS ones, so anyone can probably find out. To continue... Here's what it looks like when you stack up the cases by premiumization class: So we can see that the higher the premiumization, the steeper the curve, at least since 2009 (for spirit types with no data past 2013 or 2014 I copied their 2013 values and called it flat) Link to comment Share on other sites More sharing options...
Canarse Posted March 1, 2016 Share Posted March 1, 2016 Interesting stuff. From my non-scientific look at the chart it appears bourbon sales have grown around 33% since '09? That's a pretty serious jump for a product that takes at least 4 years to increase supply. Sure, vodka is booming, but who ever heard of a vodka shortage? Link to comment Share on other sites More sharing options...
The Black Tot Posted March 1, 2016 Share Posted March 1, 2016 So, with this data in front of us, it appears that the bubble is, and we kind of knew this anyway, in the upper-priced bottles on the market. I'm going to retract my statement about sales falling off Joe, because looking at the history of the data, it looks like there will remain a core set of buyers at the value level, at least. However, this thread in particular is concerned with the bubble in the premiums. One thing is pretty certain, when spirits purchasing levels were at record levels in the 60s/70s, there weren't $200+ bottles on the shelves, even if you index for inflation. So I suppose perhaps the most accurate way to summarize the situation is that we're not in a limited super premium bourbon bubble, we're in a "fancy booze spendin'" bubble, affecting all categories, of which bourbon is one. The outrage is of course that the (debatably) better booze is being siphoned out of the premium (and even value) price bracket and into the new high and super premium price points. Analyzing the bourbon bubble this way, in terms of cases of high priced bottles sold, we're not done with the bubble, because the only reason those case numbers aren't higher in the bourbon world is that the older stocks aren't coming up fast enough to meet the demand. America wants fancy, limited, and expensive. As a nation, the US seems less concerned with what kind of spirit it is than whether it is F,L and E. BUT, I would think there is an equilibrium point that may soon be reached between how many people want to pay for and drink super premiums and how much are produced. The market for F, L, and E seems to be getting addressed by all the spirit categories, in terms of them throwing more and more cases of expensive stuff each year at the consumer base. There must soon come a point where the amount of cases supplied brings the nation collectively to the end of their collective booze budget. Link to comment Share on other sites More sharing options...
The Black Tot Posted March 1, 2016 Share Posted March 1, 2016 16 minutes ago, Canarse said: Interesting stuff. From my non-scientific look at the chart it appears bourbon sales have grown around 33% since '09? That's a pretty serious jump for a product that takes at least 4 years to increase supply. Sure, vodka is booming, but who ever heard of a vodka shortage? I'm interested particularly in the vodka numbers as they pertain to the increase in consumption of spirits. There is little debate that nobody is bunkering Grey Goose. Vodka sales are much more clearly indicative of national consumption trends in this regard. I wonder what percentage of the super premium bourbon cases are consumed? Maybe 2/3rds? Three quarters? Link to comment Share on other sites More sharing options...
SebastianLloyd Posted March 1, 2016 Share Posted March 1, 2016 More choices of spirits than ever before. One thing that I enjoy about this boom is that Canadian and Irish whiskey are making better changes for quality. Link to comment Share on other sites More sharing options...
The Black Tot Posted March 1, 2016 Share Posted March 1, 2016 (edited) 20 minutes ago, The Black Tot said: There must soon come a point where the amount of cases supplied brings the nation collectively to the end of their collective booze budget. ...OR exhausts them to the point of experimenting with value options. Many is the member here (and I am one) who started out spending big dollar on limiteds to figure out what they were about, and then they find their stride with better value-for-money propositions once they learn more and (in part) get sick of the pricing or hunting. In this light, the bubble seems cultural, rather than organic groundswell of appreciation for America's native spirit. It looks to me like the nation has lost their heads/grounding regarding the pursuit of the rare and expensive, and it's affecting all categories at once. Therefore it's my initial conclusion that the end of the boom will come as the result of a change in national values either due to an economic shift, or eventually, the rise in production numbers of super premiums until there are enough to go around for these high rollers. I think the former may happen before the latter. So, Joe, the distilleries will still have their sales. But they may not have the same PROFITS, since it's a question of how long they can get away with higher margins on premiums, high premiums, and super premiums. And maybe how long America as a collective can get away with (or be enthusiastic about) paying those, more and more, year over year. At the same time, the rise in consumption of spirits also has limits. If we stay on our upward trend we may soon reach the levels of the 60s and 70s, which could provoke the kind of temperance campaigns/measures that seemed to work in the early 80s. And that means glut, and massive drop in sales, a la late 80's to 1999. OK, that's me done for now. Edited March 1, 2016 by The Black Tot Link to comment Share on other sites More sharing options...
tanstaafl2 Posted March 1, 2016 Share Posted March 1, 2016 12 minutes ago, The Black Tot said: I wonder what percentage of the super premium bourbon cases are consumed? Maybe 2/3rds? Three quarters? Another part of the problem here in answering this question would be the increasing perception (I have no specific data of course) that the FLE stuff is increasingly going to on premises accounts where it presumably is getting consumed by the pour. There would be little value in most restaurants in having a large "bunker" of high end spirits except perhaps for those places that cater to a high end clientele willing to pay stupid high prices to get the "super premium" drink whenever they want it. Link to comment Share on other sites More sharing options...
jvd99 Posted March 1, 2016 Share Posted March 1, 2016 32 minutes ago, The Black Tot said: So I suppose perhaps the most accurate way to summarize the situation is that we're not in a limited super premium bourbon bubble, we're in a "fancy booze spendin'" bubble, affecting all categories, of which bourbon is one. That's a great way to describe what's going on Link to comment Share on other sites More sharing options...
smokinjoe Posted March 1, 2016 Share Posted March 1, 2016 Super Premium brands would be those over $25 per bottle at retail. Maker' Mark, Bulleit, Gentleman Jack, Knob Creek, and Woodford Reserve, are category leaders in this segment according to this article: http://chuckcowdery.blogspot.com/2015/09/top-five-super-premium-bourbons-as.html?m=1 A good article here about the growth: http://www.columbian.com/news/2016/feb/02/makers-of-hard-liquor-toast-more-strong-sales/ Link to comment Share on other sites More sharing options...
Charlutz Posted March 1, 2016 Share Posted March 1, 2016 Thanks Black Tot for collecting, posting and digesting the data. It was excellent and informative. I am sure people will have varied interpretations about what is causing the numbers, leading to varied and probably opposite conclusions. That discussion is fun. The other variables that occurred to me were population growth over the last 50 years and consumption trends within certain age groups. No need to chase those numbers down, but it's interesting to consider the volume of drinking in the 60s/70s (baby boomers in their 20's and 30's) against a much larger population today. Combine that with whether brown or clear spirits are more fashionable among the young and old and it gets interesting. Link to comment Share on other sites More sharing options...
The Black Tot Posted March 1, 2016 Share Posted March 1, 2016 2 hours ago, tanstaafl2 said: Interesting that rum seems to have flattened out a bit after stronger growth in the early 2000's. Perhaps a lot of rum drinkers have migrated to whiskey and tequila? Yes I thought the same, Bruce. It was around 2008 that Zacapa was outed for notably reducing the component of older rum in the blend, and the sugaring scandal hit for all the big premium rums (sign the petition in my sig y'all!). I think a lot of people who were buying these in good faith jumped ship at that point. The graph seems to show this. Link to comment Share on other sites More sharing options...
The Black Tot Posted March 1, 2016 Share Posted March 1, 2016 3 minutes ago, Charlutz said: The other variables that occurred to me were population growth over the last 50 years and consumption trends within certain age groups. No need to chase those numbers down, but it's interesting to consider the volume of drinking in the 60s/70s (baby boomers in their 20's and 30's) against a much larger population today. Combine that with whether brown or clear spirits are more fashionable among the young and old and it gets interesting. True Charlutz, regarding the demographics of the situation. North America did have a lot of 20yr olds in the late 60's/early 70s. I've lost track of where we are demographically these days. Link to comment Share on other sites More sharing options...
kcgumbohead Posted March 1, 2016 Share Posted March 1, 2016 I have enjoyed this thread and all the points discussed since it was started. Thanks Tot for assembling the latest group of charts as there are some interesting talking points in there. I for one won't have much of an impact on future uber, super,ultra premium curves as I am kinda over it. I am NOT over excellent whisky by any means but have experienced and enjoyed enough that most future purchases will consist of sub 25.00 bottlings. I am finding more of those to my liking all the time and I stockpiled enough of my spendier but below todays $$ favorites and select specials to last well into my future (The occasional 4RGS/local PS bottle excluded, I might be getting more frugal, practical and put off by certain aspects of this craze but a dedicated cult member I remain!!) I have joined the ranks of those whose purchasing is throttling back these days as I will sip happily on the sidelines and see/taste how this all plays out a few years down the road. Link to comment Share on other sites More sharing options...
Paddy Posted March 1, 2016 Share Posted March 1, 2016 Nice work Paul... you've managed to feed the entire groups 'nerd withdrawal' for the day. Very well done! Link to comment Share on other sites More sharing options...
Harry in WashDC Posted March 1, 2016 Share Posted March 1, 2016 'Way back in your early graphs, aggregate consumption of distilled spirits peaked just post-WWII and again about 1970. The dip in the 1980s is attributed to the rehab of heavy drinkers and the concurrent social stigma associated with overindulging. That all fits. Based on macro-economic info tucked in my head (but from a forgotten source) and on anecdotal info passed on to me by members of The Greatest Generation after I got old enough to lawfully drink with them, the post-WWII bump can be partially attributed to the shift of alcohol from war-use to consumer use as well as an increase in demand by returning, demobilized military persons. (My Dad remembered paying $50 for a bottle of Ten High circa Nov 1944.) When traveling overseas with some TGG members to places like Eastern Europe, China, etc., in the mid-1970s-and mid-1980s, I was surprised at how MANY of them carried BOTTLES of US booze, especially since they did not hesitate to drink the local beer, wine, spirits (anything but water or milk). Rather, this taste of home was consumed after we got back from evening activities. Us young folks hadn't even considered "bringing our own". My generation (the front end of the Boomers) in our first lawful decade consumed mostly beer, some wine (remember Mateus, you all?), and the occasional scotch and soda or gin and tonic (the latter two usually when on dates with someone special). Well, Harvey Wallbangers, Purple Jesuses, and some other things popped up but weren't regularly consumed. About the time we started making the shift from beer and wine to spirits (well post-college when we finally found a good, permanent job and were settling down), things like Mothers Against Drunk Drivers (circa 1980) and fitness centers and staying in shape and designated drivers became important. Many is the lunch when I was the only person having an alcohol drink-even if it was just beer. Now, all this (and I really do thank Paul for putting this info together as it helped focus my thoughts on this) leads me to wonder: How much of the current rise in aggregate consumption can be attributed to the cocktail movement? That certainly helps to explain the continued increase in vodka sales. It also explains the wider availability of liqueurs and gins and various whiskeys. Keep those options coming. Will this increasing demand do for whiskey (or has it already done it) do what increased demand for wine did - lead to a more educated consumer who, in turn, demands better quality at EVERY price point instead of just the premium range? The bordeaux I used to buy at about $25 per are now well over $100. BUT, I have found some lesser houses that, at about $45 to 60 per, hit my sweet spot. They didn't used to (at $10-15 per); they are definitely better than they were. I've also found quite a few non-bordeaux in the $20 range I like. In short, I got complacent; now, I try new things. I even drink chardonnay from time to time (but hold the oak). Will whiskey go the way of beer? We hit an all-time high in the number of breweries last year. And although consumption of Bud and the other mass market beers have declined, AB and its competitors have entered the "craft" market with their own brands. I like the experimentation going on in beer. I see the same thing happening in whiskey. While the micros may not be able to displace, say, OGD, they can offer me a "change" from basic OGD. So, I think TBT's observations have merit. Rumination is now closed. Is cocktail time. Link to comment Share on other sites More sharing options...
smokinjoe Posted March 2, 2016 Share Posted March 2, 2016 I love discussions like this on SB. Thank you to Paul and others for engaging. A couple things. First, I would like to reaffirm my primary reason for entering and re-entering into this thread. As I have stated, I believe it is important to differentiate between what is an indisputable "boom" in bourbon appreciation, acceptance, sales growth and distillery investment, from the bourbon "bubble" which I characterize as all of the nonsense and skullduggery associated with secondary market pricing and sales, including inflated pricing, people clearing shelves, people chasing distributor trucks, etc., etc. The "boom" is laudable and healthy (though, it is not without its growing pains for producer and consumer alike), for the distilleries, various level of governments tax bases, the many people employed by the industry, and mostly for us consumers. I am most glad to see it and be a part of it, and I hope it continues. As a bourbon enthusiast, it is the boom and the impact of it, that allows the distilleries to invest in new, different, and better whiskey to meet our demand. On the other hand, I won't shed a tear when the "bubble" and all that goes along with it, pops. If and when it does, the "boom" will not necessarily "bust". We and the industry will just get a better degree of healthy. The Boom doesn't exist because of the Bubble. The Bubble exists because of the Boom. Again, the Boom is different from the Bubble. One of the big takeaways I have from the charts that Paul referenced, and from further research I have done, is that there is wide spread growth through all of the segments except Value, though 2012-2015 numbers have increased even there. And, no doubt the largest growth by percentage in case sales is in the High End Premium (HEP) and Super Premium (SP) segments. (A job well done by the distilleries in up-selling) http://www.discus.org/assets/1/7/Bourbon_and_Tennessee_Whiskey_2015.pdf But, I think we all have a different idea on what HEP and SP actually mean from what is actually used by DISCUS. Please see the Retail Bottle Price breakdowns for each of the segments: Value = <$12/bottle at retail Premium = $12 - $18/bottle at retail High End Premium = $18 - $30/bottle at retail Super Premium = $30+/bottle at retail (From DISCUS.ORG) http://www.discus.org/assets/1/7/Distilled_Spirits_Industry_Briefing_Feb_6.pdf What this means to me is, much of the growth in the boom is by nearly any definition "affordable" bourbon, and the love affair with the expensive Limited Editions, Specialties, One-offs, etc. is still a small percentage of the overall increase. Their hype may grease the tracks, but they are not the train. The train is still moderately priced, readily available bourbons. And, the average man and woman with average means are still a big part of the ridership. Yes, it is getting more expensive, and probably will continue to do so. As it should. But shoot, even the Super Premium level starts as Low as $30 for DISCUS reporting purposes (a change from my earlier post using $25). How many thought the top bracket started that low? The boom is real, with depth and breadth, has been time tested, showing no signs of relenting., and I don't believe it is an accumulation of random, non-substantive, conditions and events, and solely built on a mad dash to the most expensive bottles available. I'll end for now with this: I have no illusions that this will last forever. Yes, the "Boom" will slow and eventually end. Lots of things can and will bring that. The only one Paul hasn't mentioned in the thread was an asteroid hitting earth... As I have said, I hope it is measured, and the result being steady growth. But, I'm not hoping for that day any time soon. And, I certainly have no interest in a crash landing, and the plight that would bring. I don't want to see the good times end, the innovation and new products cease, distilleries shrinking or closing, or the lay-offs of my friends and acquaintances. I trust that the management, ownership, and investors in the distilleries don't wish for that either, and will act accordingly to keep the bourbon industry vibrant for years to come. I'll do my part, as well. Link to comment Share on other sites More sharing options...
Canarse Posted March 2, 2016 Share Posted March 2, 2016 Value = <$12/bottle at retail Premium = $12 - $18/bottle at retail High End Premium = $18 - $30/bottle at retail Super Premium = $30+/bottle at retail Compare these prices to scotch. Bourbon is still a bargain! Considering value bourbon is $12 and under says there is a lot of demand at the low end. As a newbie around here I've been impressed with the thought process and the passion for brown liquor. I do have one thought that this thread has brought to mind.....There seems to be some kind of undercurrent here about what bourbon you drink based upon price. I love a great deal as much as anyone, but what you pay for your booze is not important. Drink what you want. Cheap or expensive it doesn't matter. Link to comment Share on other sites More sharing options...
amg Posted March 2, 2016 Share Posted March 2, 2016 3 minutes ago, Canarse said: I love a great deal as much as anyone, but what you pay for your booze is not important. Drink what you want. Cheap or expensive it doesn't matter. Well, it matters if you can't afford the expensive stuff all the time. Link to comment Share on other sites More sharing options...
Canarse Posted March 2, 2016 Share Posted March 2, 2016 Just now, amg said: Well, it matters if you can't afford the expensive stuff all the time. I get that. It's great to hear about bargain brands, but it's cool if you can afford the good stuff, too. Personally, I will be looking for some FR Yellow when I go out of state to give it a run. Link to comment Share on other sites More sharing options...
El Vino Posted March 2, 2016 Share Posted March 2, 2016 And who said that we don't have an inflation problem here in the US. Just depends on where you look. Good old demand pull inflation, otherwise known as pricing power. Smokinjoe, great post and agree with the distinction made between bubble and boom. Link to comment Share on other sites More sharing options...
The Black Tot Posted March 2, 2016 Share Posted March 2, 2016 Damn it all, I forgot the asteroid. Link to comment Share on other sites More sharing options...
The Black Tot Posted March 2, 2016 Share Posted March 2, 2016 I also think DISCUS needs a few more categories in order to track what's going on. Some of the higher premium categories won't even be new offerings - some of them will be old brands that increased in price from 29 and under to the low 30s, and made a category jump. I think at the very least an over $70 category needs to be added. I think that the prices have risen so quickly beyond DISCUS' ability to track them without creating entirely new premiumization levels is telling in itself. Link to comment Share on other sites More sharing options...
TheVilleWRX Posted March 3, 2016 Share Posted March 3, 2016 The Black Tot makes an important point. Most of what I drink made that category jump in recent years. It is what has driven me more to OGD Link to comment Share on other sites More sharing options...
smokinjoe Posted March 3, 2016 Share Posted March 3, 2016 8 minutes ago, TheVilleWRX said: The Black Tot makes an important point. Most of what I drink made that category jump in recent years. It is what has driven me more to OGD You bet there have been jumps. I would wager that if you look at the first link I provided in my last post http://www.discus.org/assets/1/7/Bourbon_and_Tennessee_Whiskey_2015.pdf and see where there has been a down-tick in case volume in a lower segment, it is due to some brand(s) moving into a higher segment. I'll bet we've all passed on a brand, or two, when the pricing got beyond what we were willing to pay. Whether that be from $12 to $15, $17 to $20, or $29 to $35. Furthermore, if you look at the percentages of case volume that each segment represents to each years totals, the growth in the HEP and SP has definitely come at the expense of the Value and Premium Segments. But, the shift isn't as large as I would have thought. For instance: Value: 2002 = 22.6%; 2015 = 16.2% Premium: 2002 = 32.6%; 2015 = 26.3% High End Premium: 2002 = 42.4%; 2015 = 48.5% Super Premium: 2002 = 2.4%; 2015 = 9% Key takeaways for me, though, are that still in 2015 91% of bourbon supplied during the boom is under $30 a bottle. Only 9% is over $30. I too, would like to know what the breakdowns are as you move farther away from $30. But, I'll bet that it quickly goes to miniscule numbers, probably to the point that DISCUS can hardly measure it. Also surprising, is that during these last 3 years of the boom (2013 - 2015), the value segment had record case volume each year since recording back to the start of the century. Finally, the Premium segment ($12-$18) increased case volume 10 of the 15 years. The Boom is at every shelf level apparently. The segment pricing chart is really telling to me, but just confirms what most of us who enjoy this hobby have been telling anyone who will listen: Low, medium, or high shelf...bourbon is a fantastic value. Link to comment Share on other sites More sharing options...
miller542 Posted March 23, 2016 Share Posted March 23, 2016 Maybe its just me, and maybe its just the state of Utah (all jokes aside) but it kinda feels like the mania over limiteds is slowing. And supplies of regular releases that previously saw shortages seem to be stabilizing. Certain limited releases aside, maybe we're seeing this thing cool off and settle in. Link to comment Share on other sites More sharing options...
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