Our ongoing observations about whether the boom has peaked

[Kepler]

13 minutes ago, flahute said:

I liked it so much I gave it its own thread earlier this week. It didn't generate much conversation though.

https://www.straightbourbon.com/community/topic/26232-bourbonomics-taking-advantage-of-human-nature/

 I totally missed that Steve.  Thanks for sharing.

[The Black Tot]

15 hours ago, flahute said:

It didn't generate much conversation though.

 

I think the conversation is getting less and less comfortable with the rising prices.

 

If this market climbs too much higher,  the sun will melt the wax seals off of the limited edition bottlings in Icarus' bunker.

[Whiskeythink.com]

I find what he is talking about a lot on the FB groups. Someone will ask if such-&-such bottle is worth such-&-such price. The answers are always "no, its worth this retail". Then a few people get upset at that, stating its worth what someone wants to pay & who are you to say its only worth retail. I have to wonder if people get upset because they dont want their own purchases doubted when they paid 4x retail. They justified it as rare & worth paying that at one point, & get upset when someone brings them back to earth. The other side of the coin is such-&-such bottle may good but not great, but they have convinced themselves when tasted that it actually is great, often times to justify the price paid.

[mikeydk]

On 4/30/2018 at 5:01 AM, Whiskeythink.com said:

I find what he is talking about a lot on the FB groups. Someone will ask if such-&-such bottle is worth such-&-such price. The answers are always "no, its worth this retail". Then a few people get upset at that, stating its worth what someone wants to pay & who are you to say its only worth retail. I have to wonder if people get upset because they dont want their own purchases doubted when they paid 4x retail. They justified it as rare & worth paying that at one point, & get upset when someone brings them back to earth. The other side of the coin is such-&-such bottle may good but not great, but they have convinced themselves when tasted that it actually is great, often times to justify the price paid.

Mostly this is true in my experience with various forms of "collecting" over the years.  There's the "retail ONLY!" crowd, the "I'll pay what I have to if I can find it at all" crowd, the "i have to have it now FOMO" crowd, and the "i'll wait for the market to crash" crowd.  

 

These arguments go from desirable whiskey back through the ages of Action Figures, Beanie Babies, POG's, Magic Cards, Happy Meal toys, hot wheels, baseball cards, to marbles.  The arguments never change, just the desirable hot unattainable object of the moment.  

 

The answer to the question of "is such and such a bottle worth such and such a price" is up to the individual, but in my opinion, it's the wrong question.  I'd love to only pay retail for everything.  I also understand the nature of the market we're in, sometimes I'll get lucky (more and more rare these days), but mostly I have to decide what's worth more?  The opportunity to try something that is very hard to find (and pay much much more than retail), or fight a principled stance to not pay more than retail.  If I choose to pay more for the experience, the last thing I wish to hear is how I overpaid, or am part of the problem.  Or if I take the principled stance, the last thing I want to hear about is how someone else overpaid and is part of the problem.  

 

I appreciate both sides, but as someone who has overpaid for more than a few bottles from time to time, I have chosen a balance between the two.  I'll never see some of the really exclusive things for retail in California, so I decide to not try to buy all of them, I understand I'll never be a completist.  So I must choose some good things at retail (OGD 114, Beam Distillers cut, Russell's lineup etc..) and decide which things to sink my extra scratch into (last year it was $500 for a bottle of Stagg that I'd never seen, never had, and made for a fantastic bottle to bring to my local "book club" and share with great friends).  

 

Earlier I mentioned that many times the wrong question is being asked, and perhaps that's not fair.  I think I meant that often the answer is often wrong, based on where you fall in the battle between "retail" or "not retail".  It's not so much "is this worth that?" and should I weigh in with an "economics" or "principle" answer, but more along the lines of "is this a whiskey that's good enough to consider paying more for because it's worth exploring?"  

 

 

 

 

[Paddy]

^^^*It’s worth exactly what one is willing to pay... no more, no less.

[Harry in WashDC]

RE: the ones overpriced - I've had a few of those in the $10 to $15 range.  Looking at all this long term, which is an aging cycle for bourbon, a quick check of how many rick houses the various large distillers have built/are building coupled with a check of the Distilled Spirits Council's state of the industry releases suggests to me that, in four to ten years, we should be seeing (a) some smoothing of supply of non-premium things we like/want, (b) more flavored bourbons kind of like the vodka craze that recently seems to have peaked because "they" ran out of new stuff to flavor it with, (c) an increase in styles offered in foreign markets that we can only get by traveling or via mail order or via friends, (d) more resurrections of bottom-shelf brands long extinct and aimed at those of us who like to try "what's new is old" products like the non-Maryland but Maryland-style ryes popping up, (e) new and different, now and today brands like the OF "YEAR" series that supplant tried and true but tired labels, and (f) [insert your own ideas HERE].

 

Which reminds me, I had some bourbon in a glass near me which needs attention - somehow it evaporated away so I have to go find some more.  So many choices on my dining room floor.  So many more in the bunker.  AND, only a handful are top shelf.  Life is fat.

[Old Hippie]

I've made my living in the adult beverage industry the past 30 or so years in both supply and distribution. Was on the wine side then switched to spirits. Regarding chasing the whiskey unicorn; We are now with bourbon where we were with wine in the late 90's and early 2000's. Bourbon is hip, cool and chic and too many people like what they think they are supposed to like and consequently want what is hardest to get thus driving demand well past supply. Many distillers recognize this and purposely keep supply regulated to keep stay behind demand on their "must have" whiskies. And who can blame them - its just good business. 

I believe we still have a long, long way to go before we hit the peak. This is due primarily to the fact that the average age of the bourbon drinker is very much lower than it was 10 or 15 years ago giving us a much larger universe of drinkers. 

I think we will experience a major downsizing of the micro/craft distillers at some point and the new whiskey drinkers mature and come to understand that they do not have to pay $30 - $40 for a good whiskey as is often charged by these small distillers. At the end of the day the big guys will get bigger (as evidenced by an influx of new fermenters and stills), the smaller to medium companies that do it the right way should find their niche and most of the little guys using sourced whiskey and put it into a nice package with a clever label will be gone. 

I think we will see more and more experimenting with different wood finishing, aging techniques, mash bills (Straight Malt will become a thing) and proof variations. In other words we got some good things coming. 

[mikeydk]

46 minutes ago, Old Hippie said:

I've made my living in the adult beverage industry the past 30 or so years in both supply and distribution. Was on the wine side then switched to spirits. Regarding chasing the whiskey unicorn; We are now with bourbon where we were with wine in the late 90's and early 2000's. Bourbon is hip, cool and chic and too many people like what they think they are supposed to like and consequently want what is hardest to get thus driving demand well past supply. Many distillers recognize this and purposely keep supply regulated to keep stay behind demand on their "must have" whiskies. And who can blame them - its just good business. 

I believe we still have a long, long way to go before we hit the peak. This is due primarily to the fact that the average age of the bourbon drinker is very much lower than it was 10 or 15 years ago giving us a much larger universe of drinkers. 

I think we will experience a major downsizing of the micro/craft distillers at some point and the new whiskey drinkers mature and come to understand that they do not have to pay $30 - $40 for a good whiskey as is often charged by these small distillers. At the end of the day the big guys will get bigger (as evidenced by an influx of new fermenters and stills), the smaller to medium companies that do it the right way should find their niche and most of the little guys using sourced whiskey and put it into a nice package with a clever label will be gone. 

I think we will see more and more experimenting with different wood finishing, aging techniques, mash bills (Straight Malt will become a thing) and proof variations. In other words we got some good things coming. 

Thank you for the insight.  Question- Do you think that the sourced/fancy label "brands" will really disappear?  I think it'll only grow, especially with the celebrity whiskey brands.  I'm thinking a bit beyond the Matthew/Wild Turkey, and Bob Dylan things, toward the untapped hip-hop / youth aspirational crowd that is only beginning to discover bourbon as a lifestyle choice. This market has huge opportunity for "branding."  

[fishnbowljoe]

3 hours ago, Old Hippie said:

I've made my living in the adult beverage industry the past 30 or so years in both supply and distribution. Was on the wine side then switched to spirits. Regarding chasing the whiskey unicorn; We are now with bourbon where we were with wine in the late 90's and early 2000's. Bourbon is hip, cool and chic and too many people like what they think they are supposed to like and consequently want what is hardest to get thus driving demand well past supply. Many distillers recognize this and purposely keep supply regulated to keep stay behind demand on their "must have" whiskies. And who can blame them - its just good business. 

I believe we still have a long, long way to go before we hit the peak. This is due primarily to the fact that the average age of the bourbon drinker is very much lower than it was 10 or 15 years ago giving us a much larger universe of drinkers. 

I think we will experience a major downsizing of the micro/craft distillers at some point and the new whiskey drinkers mature and come to understand that they do not have to pay $30 - $40 for a good whiskey as is often charged by these small distillers. At the end of the day the big guys will get bigger (as evidenced by an influx of new fermenters and stills), the smaller to medium companies that do it the right way should find their niche and most of the little guys using sourced whiskey and put it into a nice package with a clever label will be gone. 

I think we will see more and more experimenting with different wood finishing, aging techniques, mash bills (Straight Malt will become a thing) and proof variations. In other words we got some good things coming. 

 This ones for you Old Hippie. 

 

Biba! Joe

[FasterHorses]

Not sure if this is ok to discuss but, although I've never bought or sold on secondary sites...I do notice that it seems a majority of the outrageous bottles keep reappearing month after month. Which leads me to believe that some part of this boom may be smoke and mirrors...people hoping that some sucker will pay $150 for a EHTSmB and such. 

[Harry in WashDC]

8 hours ago, Old Hippie said:

I've made my living in the adult beverage industry the past 30 or so years in both supply and distribution. Was on the wine side then switched to spirits. Regarding chasing the whiskey unicorn; We are now with bourbon where we were with wine in the late 90's and early 2000's. Bourbon is hip, cool and chic and too many people like what they think they are supposed to like and consequently want what is hardest to get thus driving demand well past supply. Many distillers recognize this and purposely keep supply regulated to keep stay behind demand on their "must have" whiskies. And who can blame them - its just good business. 

I believe we still have a long, long way to go before we hit the peak. This is due primarily to the fact that the average age of the bourbon drinker is very much lower than it was 10 or 15 years ago giving us a much larger universe of drinkers. 

I think we will experience a major downsizing of the micro/craft distillers at some point and the new whiskey drinkers mature and come to understand that they do not have to pay $30 - $40 for a good whiskey as is often charged by these small distillers. At the end of the day the big guys will get bigger (as evidenced by an influx of new fermenters and stills), the smaller to medium companies that do it the right way should find their niche and most of the little guys using sourced whiskey and put it into a nice package with a clever label will be gone. 

I think we will see more and more experimenting with different wood finishing, aging techniques, mash bills (Straight Malt will become a thing) and proof variations. In other words we got some good things coming. 

Thanks.  Oh, yeah.  Welcome to SB.  I look forward to you contributions here.  Are there any questions you want us to ask you?

[Old Hippie]

18 hours ago, mikeydk said:

Thank you for the insight.  Question- Do you think that the sourced/fancy label "brands" will really disappear?  I think it'll only grow, especially with the celebrity whiskey brands.  I'm thinking a bit beyond the Matthew/Wild Turkey, and Bob Dylan things, toward the untapped hip-hop / youth aspirational crowd that is only beginning to discover bourbon as a lifestyle choice. This market has huge opportunity for "branding."  

I just don't feel that if it's not in the bottle, it's not sustainable. As new drinkers' pallets mature they will gravitate toward quality/price value over packaging. What I have found is that someone will buy the first bottle because of the package but if it aint in the bottle they won't buy a second.

[Old Hippie]

11 hours ago, Harry in WashDC said:

Thanks.  Oh, yeah.  Welcome to SB.  I look forward to you contributions here.  Are there any questions you want us to ask you?

Hah! Thanks!. Unfortunately like most folks I'm only about half as smart as I think I am....And that's on a good day

[Old Hippie]

15 hours ago, fishnbowljoe said:

 This ones for you Old Hippie. 

 

Biba! Joe

Very Cool - Cheers!!!

[mikeydk]

4 hours ago, Old Hippie said:

I just don't feel that if it's not in the bottle, it's not sustainable. As new drinkers' pallets mature they will gravitate toward quality/price value over packaging. What I have found is that someone will buy the first bottle because of the package but if it aint in the bottle they won't buy a second.

I tend to agree with you as far as the "micro" distilleries go.  Their usually too young whiskies keep me from purchasing another.  However, sourced whiskey is often good, sometimes great, and with fancy branding could be very appealing to an emerging segment of youth drinkers, and at a higher price than warranted.  See the pricing on celebrity endorsed Vodkas over the years, absurdly priced, flavored, pretty labels/design.  

[Old Hippie]

19 minutes ago, mikeydk said:

I tend to agree with you as far as the "micro" distilleries go.  Their usually too young whiskies keep me from purchasing another.  However, sourced whiskey is often good, sometimes great, and with fancy branding could be very appealing to an emerging segment of youth drinkers, and at a higher price than warranted.  See the pricing on celebrity endorsed Vodkas over the years, absurdly priced, flavored, pretty labels/design.  

valid point

[Harry in WashDC]

Chuck Cowdery's blog from yesterday (3 May 2018 5PM) notes that Diageo just bought a chunk of land next to its Bulleit distillery.  He also mentions recent land purchases by other producers including MGP.  Goodness!  Why didn't they do this ten years ago when I was ten years younger? 

 

IOW - the majors are still expanding; I'd guess they don't see the boom as having come anywhere close to its peak.

Edited May 4, 2018 by Harry in WashDC

[The Black Tot]

29 minutes ago, Harry in WashDC said:

Chuck Cowdery's blog from yesterday (3 May 2018 5PM) notes that Diageo just bought a chunk of land next to its Bulleit distillery.  He also mentions recent land purchases by other producers including MGP.  Goodness!  Why didn't they do this ten years ago when I was ten years younger? 

 

IOW - the majors are still expanding; I'd guess they don't see the boom as having come anywhere close to its peak.

 

I am happy of this news as well, but I am not getting too excited yet.

 

Plans are one thing. I'll get excited when the rack houses are finished. Same goes for Buffalo Trace.

 

A rackhouse in the hand is worth two in the planning stages. 

[fishnbowljoe]

5 hours ago, The Black Tot said:

 

I am happy of this news as well, but I am not getting too excited yet.

 

Plans are one thing. I'll get excited when the rack houses are finished. Same goes for Buffalo Trace.

 

A rackhouse in the hand is worth two in the planning stages. 

I was at BT 3 weeks ago with Vosgar and my nephew Galvin0791 to participate in a private barrel pick. We were privy to some things at that time, but....., I was there again last week, again with Vosgar, but this time it was with his two brother in laws, Dan and Mike, and not my nephew Galvin0791. We were invited to meet with Mark Brown and the management team. Yes, that is correct. We were invited.  Sometimes being in the right place at the right time, and/or doing or saying the right thing at the right time has it's advantages. I'm honestly not trying to be a bourbon snob or anything, but to quote Mel Brooks, "It's good to be the king."  Sometimes things actually do work out in your favor, and for that I thank my/our lucky stars. Sadly, for most of us, it usually doesn't happen often enough. Y'all can take that for what it's worth.

 

Things at BT are moving forward at a pretty decent pace. Warehouse AA is complete, and has been filled to at least the 5th floor. Warehouse BB is complete, and (I assume) just awaiting the final finishing touches before it's also ready to be filled. Warehouse CC has been started, and the ground is/has been prepped for Warehouse DD. We were privileged to see an overview of the warehouse expansion project. The projected foot print is absolutely amazing. The previously announced  plans were for 30 new warehouses. The slightly updated version, at least for the time being is for at least 22 new warehouses, with allowances for 8 more if things continue to go according to plan. FWIW, and without anything being said, I got the distinct impression that BT has a pretty firm handle on things. They're moving ahead with very aggressive 1.2 billion dollar expansion plans, but at the same time, they seem to be allowing for some flexibility if need be. IMHO, as long as the economy doesn't take a dump, I think we're in store for some exciting and interesting times not only at BT, but in the bourbon world in general (hopefully) in the not too distant future. 

 

Biba! Joe

[The Black Tot]

I'm very glad to read this first hand news from the drinking side of the biz.

 

It is indeed good to be King! So I keep reading, at least.

 

But this is kind of my point - Previous announcement of 30 warehouses, now down to 22 plus possible 8, with room for flexibility if need be.

 

If those were words describing my paycheck, I'd be nervous.

 

As it stands I'm not nervous about BT's rackhouse building progress of course, but I'm just happy to count 'em after they're hatched, rather than when they're announced in the planning stage.

 

Everyone who knows me knows I love BT too and I want as much of that stuff aging as fate will allow!

Edited May 5, 2018 by The Black Tot

[smokinjoe]

I often wonder how well Mark Brown, Max Shapira, George Garvin Brown IV, Beam, Kirin, etc, sleep at night after letting it ride like they have on this boom.  Particularly, after dragging their asses through the drought that was.  Things look good, and have for some time, but I am sure there are nights when they wake up at 3:00 AM in a cold sweat asking themselves if they really know what they’re doing.  The numbers are just staggering.  

[DCFan]

1 hour ago, smokinjoe said:

Things look good, and have for some time, but I am sure there are nights when they wake up at 3:00 AM in a cold sweat asking themselves if they really know what they’re doing. 

That's the story of my life and I'm not talking whiskey.  

Edited May 5, 2018 by DCFan

[smokinjoe]

34 minutes ago, DCFan said:

That's the story of my life and I'm not talking whiskey.  

Sorta like going to bed at 2 with a 10, then waking up at 10 with a 2?  Unfortunately, these guys can’t tiptoe out of the room in their skivvies holding their clothes and shoes...Breakfast must be bought!  LOL

Edited May 5, 2018 by smokinjoe

[Vosgar]

Looks like the boom/insanity is continuing........

A bottle of this went for $440 (not including the 10% buyers fee) at a European auction that ended yesterday. The bottle I've got in my stash from 2010 cost $31. Crazy

[HoustonNit]

Looks like the boom/insanity is continuing........
A bottle of this went for $440 (not including the 10% buyers fee) at a European auction that ended yesterday. The bottle I've got in my stash from 2010 cost $31. Crazy

That’s crazy considering just last summer I was able to find this at a bar in Europe and could’ve drank the bottle by the glass for less than half of that.