Our ongoing observations about whether the boom has peaked

[Charlutz]

1 hour ago, WhiskyInTheBoro said:

 

I'm new to this board guys, so help me out. Is the hubris level of the poster usually directly proportional to his number of posts?

 

As the internet goes, this is a very congenial board. If something can be interpreted in more than one way, here you should assume it was meant in the most positive way. It's a different kind of place than a lot of the internet. 

[Thig]

 
As the internet goes, this is a very congenial board. If something can be interpreted in more than one way, here you should assume it was meant in the most positive way. It's a different kind of place than a lot of the internet. 

Very well said, it's so easy to offend and be offended on some forums but my experience here has been to assume the best unless it is very obvious the intent was otherwise.

[portwood]

16 hours ago, fishnbowljoe said:

... but I tend to think that (at least) the major distilleries probably have some kind of idea of what the future holds in store. 

 

Nothing derogatory aimed at anyone or anything here, but I've grown weary of this whole mess lately. Maybe it's because I've possibly achieved my bourbon Zen, or maybe it's because I just don't give a rats ass anymore. I really don't know for sure. But Booker's at $100.00 a bottle? No freakin' way. I also refuse to participate in raffles and such, and pay $$$ just for the chance to possibly get a bottle of something deemed hard to find. Furthermore, there's no way in hell I'll pay secondary market prices for specialty stuff. Hopefully I can continue to purchase occasional "fill in"  items like BT at a decent price around here now and then. In that same vein, I hope I'll still be able to get a bottle or three of HH 6 BIB every now and then on my trips to KY.   That's pretty much where I'm at right now. I'll be fairly content to drink my bunker down and weather the storm as best as I can. Something tells me I probably won't have a problem in doing so.  Just my thoughts, but YMMV.

 

Cheers! Joe

 

People running distilleries are no better at predicting the future than anyone else. Therefore, I think most of them are flying by the seat of their pants, the same way they were back in the days that led to all the long-aged spirit sitting in warehouses ...

 

I got into this about 6 years ago. For the first 5 years I chased everything "new", and in some cases I was willing to pay a bit more than msrp. I now have so many unopened bottles, I have no need to buy anything for at least 10 years. I'm not willing to pay the asking prices for the "new" stuff I'd like to try, so like you, I don't give a rats ass anymore.

 

I can't predict the future but I can confidently say the whisk(e)y marketplace will be different in the next 10 years than its been the last 10. I no longer have the "need" to chase unicorns ... given the amount of booze I have in the house I can be very selective for the foreseeable future. For now, I'll drink the whisky I already have and spend the few extra dollars I have on good "craft" beer....

[portwood]

16 hours ago, fishnbowljoe said:

... but I tend to think that (at least) the major distilleries probably have some kind of idea of what the future holds in store. 

 

Nothing derogatory aimed at anyone or anything here, but I've grown weary of this whole mess lately. Maybe it's because I've possibly achieved my bourbon Zen, or maybe it's because I just don't give a rats ass anymore. I really don't know for sure. But Booker's at $100.00 a bottle? No freakin' way. I also refuse to participate in raffles and such, and pay $$$ just for the chance to possibly get a bottle of something deemed hard to find. Furthermore, there's no way in hell I'll pay secondary market prices for specialty stuff. Hopefully I can continue to purchase occasional "fill in"  items like BT at a decent price around here now and then. In that same vein, I hope I'll still be able to get a bottle or three of HH 6 BIB every now and then on my trips to KY.   That's pretty much where I'm at right now. I'll be fairly content to drink my bunker down and weather the storm as best as I can. Something tells me I probably won't have a problem in doing so.  Just my thoughts, but YMMV.

 

Cheers! Joe

 

People running distilleries are no better at predicting the future than anyone else. Therefore, I think most of them are flying by the seat of their pants, the same way they were back in the days that led to all the long-aged spirit sitting in warehouses ...

 

I got into this about 6 years ago. For the first 5 years I chased everything "new", and in some cases I was willing to pay a bit more than msrp. I now have so many unopened bottles, I have no need to buy anything for at least 10 years. I'm not willing to pay the asking prices for the "new" stuff I'd like to try, so like you, I don't give a rats ass anymore.

 

I can't predict the future but I can confidently say the whisk(e)y marketplace will be different in the next 10 years than its been the last 10. I no longer have the "need" to chase unicorns ... given the amount of booze I have in the house I can be very selective for the foreseeable future. For now, I'll drink the whisky I already have and spend the few extra dollars I have on good "craft" beer....

[Limegoldconvertible68]

Boom and Bust cycles occur in all industries. They all share the same characterizations. Doesn't matter whether its coal, steel, cigars, home prices  or bourbon the cycle will be the same. Everyone will tell you "this time it will be different" but it never is. As the end of the boom approaches you start see the classic signed appearing. It's my opinion only but I see ALL the signs the say the end is near. Not tomorrow probably not this coming year but things such as the crazy rise of newcomer NDP's and multitudes of craft distillers all commanding premium prices for mostly crap products to the building projects of the big boys I see the boom in its final phase. 

[smokinjoe]

The renewed activity in this and other threads reminded me of this article that appeared in the Atlanta paper last month:

 

http://www.chicagotribune.com/business/ct-beam-whiskey-sales-1108-biz-20161107-story.html

 

 

 

[amg]

16 hours ago, mbroo5880i said:

 

No offense intended. If you felt my general response was directed toward your post, I apologize for any sense of such.   I took Andrew's post to be a humorous response to the predictive powers most of us would love to have. I have seen nothing to predict a top of the boom or that it still has more legs. History tells us that the more obvious the signs, the more likely we are to miss them. We won't know when the boom has peaked until long after the fact.

Yep, I've long since given up on guessing what this market will do next. Every time I think that people won't pay x for y they prove me wrong.

[Prof_Stack]

My solution is to retrain my taste buds and mind to enjoy mid and lower shelf level bourbons and ryes from Kentucky.  Local distilleries are starting to finally get "straight" products out, and some are really good.  I'll support them provided they don't join the fray with "Beam me up the price, Scotty" marketing.  

[Caskstrength]

2 hours ago, amg said:

Yep, I've long since given up on guessing what this market will do next. Every time I think that people won't pay x for y they prove me wrong.

 

Coming from a Scotch single malt background, I am amazed that bourbon fans are so willing to pay 5-10 times standard retail for some bourbons.  Stunned.

 

Refuse to play that game, and will sit back and watch with much interest.

[amg]

2 hours ago, Caskstrength said:

 

Coming from a Scotch single malt background, I am amazed that bourbon fans are so willing to pay 5-10 times standard retail for some bourbons.  Stunned.

 

Refuse to play that game, and will sit back and watch with much interest.

In some way, it's evidence that standard retail pricing has not kept up with market conditions.

[Louisiana]

2 hours ago, Caskstrength said:

 

Coming from a Scotch single malt background, I am amazed that bourbon fans are so willing to pay 5-10 times standard retail for some bourbons.  Stunned.

 

Refuse to play that game, and will sit back and watch with much interest.

 

I don't think anyone on here is playing that game. If you sit back & watch you'll learn some good stuff on SB.com. Scotch has been bleeding people dry for a long time. Bourbon still has some shiny stars out there. You just gotta know where to look. Cheers! Jeff

 

 

[Kalessin]

On 12/17/2016 at 7:45 PM, Three quarks said:

What irks me most about the current environment is the lack of brand stability. Stuff like the loss of age statements, the one hit wonders, and shape shifting. Gone are the decades of consistency. But let's face it, the bourbon used to make OGD 114 will still be available going forward, just in some other capacity. Personally, I think the distillers benefit from the instability: "better stock up, you may not see it again." To some extent, I sympathize with the retailers. Their life must be very difficult with the endless inquiries. I don't even like to ask for things like OWA anymore. Fortunately, there is some really great stuff on practically every shelf in America.

 

 

The problem is that OGD 114 is a screamin' bargain at $24.99 a bottle (here in Massachusetts), but to me, the same whiskey with fancier bottle/label/marketing for $100+ is a pass. I think I'd still buy it at up to $45/Btl.

 

OWA still shows up at regular retail price from time to time here, and I buy a bottle if I'm so inclined.  I like it, but if it disappeared completely, there are other whiskeys that I like better.

 

 

 

 

Edited December 19, 2016 by Kalessin

[Niner Outlaw]

On 12/18/2016 at 10:56 AM, smokinjoe said:

The renewed activity in this and other threads reminded me of this article that appeared in the Atlanta paper last month:

 

http://www.chicagotribune.com/business/ct-beam-whiskey-sales-1108-biz-20161107-story.html

 

 

 

Joe, a good find. The most worrisome blurb isn't that Beam and others are raking in the money, it's that Moody's financial "would remain the fastest growing of segment of the spirits industry" and that "though the growth could slow...the spike in popularity...could last another 20 to 30 years."

 

As others have pointed out in this thread, these major distillers are investing 10s of millions in expanding their capacity--considering the time it takes to get a good bourbon to market, that means the big distillers see this boom lasting at least another 10-15 years.

[miller542]

On 12/18/2016 at 11:31 AM, Limegoldconvertible68 said:

Boom and Bust cycles occur in all industries. They all share the same characterizations. Doesn't matter whether its coal, steel, cigars, home prices  or bourbon the cycle will be the same. Everyone will tell you "this time it will be different" but it never is. As the end of the boom approaches you start see the classic signed appearing. It's my opinion only but I see ALL the signs the say the end is near. Not tomorrow probably not this coming year but things such as the crazy rise of newcomer NDP's and multitudes of craft distillers all commanding premium prices for mostly crap products to the building projects of the big boys I see the boom in its final phase. 

 

Agree 100%.  The writing is on the "Boom growth wall" as smokinjoe called it in which the Booker's price increase just added another brick.  The bigger the wall gets, the harder it will fall.

 

 

 

 

[miller542]

On 12/18/2016 at 10:13 AM, portwood said:

 

I got into this about 6 years ago. For the first 5 years I chased everything "new", and in some cases I was willing to pay a bit more than msrp.

 

 

Seems like there are so many with a similar story.  What they do next will tell what happens to this boom.  Buying levels off, industry levels off.  Drink down the bunker or move to another alcoholic beverage, the boom turns to bust, just a matter of how much damage the industry suffers.

[garbanzobean]

On 12/18/2016 at 4:01 PM, Caskstrength said:

 

Coming from a Scotch single malt background, I am amazed that bourbon fans are so willing to pay 5-10 times standard retail for some bourbons.  Stunned.

 

Refuse to play that game, and will sit back and watch with much interest.

Let's hope the bourbon industry doesn't go with the single malt solution of charging obscene prices for more "limited" releases in order to soak up some of that secondary market $$$.  I expect they are going to raise prices a bit, but not go full Diageo.  Having all bourbon LEs suddenly available on shelves but at 4-10x last year's prices could lead to mass consumer turnoff.  

 

Given the number of distilleries that are coming online (more importantly, the sheer number of proof gallons of spirit destined to become bourbon that will be produced in the next 5-10 years), I don't think we have anything to worry about in terms of standard bottlings.  There's going to be lots of very good, well aged stuff available.  It's just those Les that are either going to be unobtanium or $$$$$ for a long time.

[smokinjoe]

1 hour ago, miller542 said:

 

Agree 100%.  The writing is on the "Boom growth wall" as smokinjoe called it in which the Booker's price increase just added another brick.  The bigger the wall gets, the harder it will fall.

 

 

 

 

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.  The boom is good for everybody, and will hopefully continue for some time before reaching a soft landing at, or near, equilibrium (though, based on the sheer unpredictability of all included in bourbon making and the timeline of grain to bottle, I'm sure it will experience some tumult).  The bubble could burst tomorrow, and I, nor the market in general would give a rats ass...or probably even notice.

[Richnimrod]

2 hours ago, 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.  The boom is good for everybody, and will hopefully continue for some time before reaching a soft landing at, or near, equilibrium (though, based on the sheer unpredictability of all included in bourbon making and the timeline of grain to bottle, I'm sure it will experience some tumult).  The bubble could burst tomorrow, and I, nor the market in general would give a rats ass...or probably even notice.

What Joe said!    This 'bubble' is a totally different thing, and extremely unnecessary to any of those that really care about the ENJOYMENT of Bourbon, rather than Bourbon as some sort of investment, or profit center, or the latest 'must-have' fad.    The BOOM is a wonderful thing that is providing a much needed financial boost, and the attendant stability (whether it's short-lived or more durable) to many distilleries that produce the product we love to love!    Hoping the BOOM continues for a good long time, and comes to some sort of "soft landing" is common sense for most of us, I would assume.   Just MHO, of course.

[garbanzobean]

I agree with Rich and Joe.  A broadened, stable, and relatively permanent consumer base is good for everyone.  It's easy to wish for the glut days to return for selfish reasons, but I'd hate that for the people and distilleries.  When I visit them nowadays, I see folks abuzz with pride and positive energy.  They feel like they are a part of a vibrant and growing community.  They are proud of the products they make.  That's a community I want to be a part of, not one that's trying to find creative ways to hang on to a dying tradition.  If that means I can buy all the 6-10 affordably priced 100+ proof bourbon I want, but don't get to clear the shelves of Pappiez, I'm okay with that.

[squire]

On 12/18/2016 at 5:06 PM, amg said:

In some way, it's evidence that standard retail pricing has not kept up with market conditions.

 

It could also be interpreted as some people are just damn fools.

Edited December 20, 2016 by squire

[amg]

50 minutes ago, squire said:

 

It could also be interpreted as some people are just damn fools.

Well, being a damn fool is a market condition, after all.

[squire]

That was P.T. Barnum's theory. 

[JTaylor]

1 hour ago, squire said:

 

It could also be interpreted as some people are just damn fools.

 

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... 

[Louisiana]

21 minutes ago, JTaylor said:

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... 

 

Ding Ding Ding !!!

 

These guys create artificial shortage when there's no shortage. They yell oh no it's a shortage when there's an actual shortage. Supply & Demand. As several of the big producers will tell you. The only thing worse than not enough is too much!

 

 

Edited December 20, 2016 by Louisiana

[miller542]

17 hours ago, 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. 

 

Got it, and I agree.  The problem is, its very difficult to know how much current demand is driven by the boom and by the bubble.  The bubble no doubt brought new consumers in who are here to stay feeding the boom.  This is a good thing.  As soon as the bubble side goes away, the boom side will return to its normal pace and we'll see what happens.  Hopefully those here to stay realize they don't have to continue chasing $100+ bottles to enjoy a fine drink.