Our ongoing observations about whether the boom has peaked

[TunnelTiger]

All in all this must be a great time to be in the retail side of the business.

[dboland]

Definitely. A store near my office had a bottle of Pappy 15 about a month ago that he was selling for $950. I said no thanks and then asked a couple weeks later if it had sold. It did and in its place on the shelf was 5 Whistlepigs (not sure which one) that was going for $200/bottle. Went back two days ago and there was only one of those left.

Retailers hate having too much inventory if it can't be moved and too little if it is moving fast. In his case he raised prices and has had to fill the shelves with a bunch of stuff that I have never heard of or seen before.

[koRn]

^^ haha deal. Though in reality I can't complain she indulges my hobby and buys bottles for me as well.....I can wait on the Stagg Jr. It's not going anywhere

[Fpst]

There are now 72 licensed "distilleries" in Colorado alone! Not all "make" whiskey, but a lot do. And more and more want to get in on the action, so most "Colorado" whiskey is just NDP. I just hope when the great winnowing occurs, the good ones (read: those with a good product who make it themselves) are left standing.

I'm not sure what that tells us of the current boom, but take it for what its worth to you.

[miller542]

There are now 72 licensed "distilleries" in Colorado alone!

When everyone's in, its usually a sign of a peak. Stocks, gold, housing, etc, now it seems everyone wants to cash in on the whiskey boom.

[kcgumbohead]

It may be a slow cresting wave but reading this thread in addition to most if not all the press that paints a sky is falling picture of the current bourbon landscape leaves me feeling that this is indeed the peak.

[Harry in WashDC]

I think I'm in trouble. I've been using the ever-increasing cost of bourbon to justify to my wife why I "need" all those boxes with bottles in them stashed around the house. If she ever gets wind of a bursting of the bourbon bubble, I'll be more than neck deep in "it".:skep:

[393foureyedfox]

you just need a bigger trunk, harry

[flahute]

I think I'm in trouble. I've been using the ever-increasing cost of bourbon to justify to my wife why I "need" all those boxes with bottles in them stashed around the house. If she ever gets wind of a bursting of the bourbon bubble, I'll be more than neck deep in "it".:skep:

[ramblinman]

Mother in law sent me this picture this morning

Just insane.

It also makes me wonder what my mother in law was doing at the liquor store at 10 this morning, but who am I to judge.

Edited April 21, 2015 by ramblinman

[TheNovaMan]

OUCH! Is your mother in law Melinda Gates? :toast:

[flahute]

OUCH! Is your mother in law Melinda Gates? :toast:

[flahute]

The bubble has been provided with more air thanks to the bourbon theft indictments from this week. If the news wasn't national enough with it being on NPR yesterday, it went full national this morning as a feature story on the national CBS morning news program with Charlie Rose. In addition to the full rundown on the story, it was mentioned how Pappy Van Winkle 23 can be sold on the secondary market for as much as $8,000. The other hosts then surmised how it must be "really good stuff". Our own risenc even got some air time. (He's very well spoken if you've never heard him speak.)

[shoshani]

In addition to the full rundown on the story, it was mentioned how Pappy Van Winkle 23 can be sold on the secondary market for as much as $8,000. The other hosts then surmised how it must be "really good stuff".

Not that anyone who drops eight kilobucks on a bottle would ever know, because they won't open it up and drink it. They could be buying caramel-colored turpentine in a cleverly resealed/counterfeited bottle for all they know.

[unclebunk]

That receipt blows my mind. Those five bottles cost more than all the bourbon I've ever bought in my life. Insane, indeed!

[ramblinman]

OUCH! Is your mother in law Melinda Gates? :toast:

Ha, believe me she wasn't buying. She lives in Augusta though and I'm guessing this was on the counter as an artifact of the Masters last weekend. Not surprised that the store found and jacked up prices though, with the guady rich coming into town for the tournament they probably sold every bottle they could get. Whole town goes nuts and if you're foolish enough to find yourself at a restaurant during it you're looking at $30 for a hamburger.

[Spade]

Saw this today, http://gearpatrol.com/2014/11/25/reflections-and-the-bourbon-boom/

Not sure if it's just bluster, but I thought it was interesting to see the COO of Four Roses say "I think it’ll be 2040 until we slow down at all." I think trying to predict people's preferences 25 years in the future is folly. But, maybe this is an indication of the distillers' reading of the current market.

[Harry in WashDC]

Well, if the FR COO had said, "Yeah, I think we are on the downside of the bubble and pretty soon our supply will outpace the demand," how long would it be before the Board of Directors says, "Anybody want to be our new COO?"?:cool:

[jfw]

No, the bourbon boom has not peaked. I wish otherwise, but not yet.

[dcbt]

Someone said earlier that booms tend to be towards the top when everyone is in. Time will tell if this is more evidence of that.

"at any given time, there are 100 spirit ventures being started around the country"

http://www.bizjournals.com/dallas/news/2015/04/28/taking-a-shot-dallas-pe-firm-is-first-to-focus.html?ana=e_du_pub&s=article_du&ed=2015-04-28&u=11045160944f511889f3db4a6648fe&t=1430252579

[pegasus17459]

Hey guys first time posting but have been reading the forums for probably close to 10 years now. My take is that the bourbon world will follow a similar arc to that of the craft beer scene. Has the craft beer scene peaked? No, and I don't think it will. I think craft beer is the new normal for decades until palates/intersts change, which they will at some point. Look at the limited release beers that come out and all the people that chase to get them Dark Lord, Hunnahpuh etc. I think the chase for the limiteds within the bourbon industry are here to stay and will grow.

The thing to me most impressive about the boom is the number of small/craft distilleries that are in the process of distilling and aging spirit or are planned to start within just 1 year. The number has got be close to 700 now. Some may say that the their stills and capacity is not that large, but just the sheer number of them is going to make a very big impact. It just takes so long to properly age bourbon that we will not see their contribution to the scene for probably 3-5 years. I think in 5 years time the bourbon scene is going to look VASTLY different.

Every city seems to have at least one "craft" distillery either currently aging new make or planning very soon to start aging new make. Even if just 10% of these distillers produce whiskey that is as good or better than the current majors, that will still be 100's of new distillers in just 5-10 years time. I think people will drink local, looking at it like regional point of pride, with perhaps regional influences on the bourbon. What happens to Pappy when a couple dozen new distillers (the few out of the many that know what they are doing) put on the shelf a 12 year old wheated bourbon, where due to their smaller scale, more attention was paid to the new make and the aging process? I wonder if our current beloved large distilleries (Four Roses, Buffalo Trace, etc.) will we be seen as how we view BudMillerCoors?

[dcbt]

Welcome pegasus, interesting take. I think the big difference between beer and bourbon, though, is that there really is a narrow range of flavors in bourbon due to the definition of straight bourbon. Craft distilleries really haven't figured out a way to make a better product. Beer leaves open a lot more variability for craft breweries to improve upon the Big 3. Simply put, budmillercoors is crap, whereas kentucky bourbon is very very good. Another factor is climate - you can brew beer anywhere but there are ideal spots for bourbon (eg, kentucky.)

[pegasus17459]

I don't know if I buy into the ideal spot thing. I think Kentucky is seen that way due to post-prohibition tradition and marketing. Plus it was the only thing we had for 70 years. Why Kentucky? The water? These days they can filter water to any mineral composition they want. The weather? Perhaps, but Alberta makes some pretty good rye and that is a totally different aging environment. Whose say bourbon can't be made well in that environment? Nobody has prolly tried it in 80 years.

I do see your point with beer, much more variability. And it is generally best consumed fresh which adds to the "drink local" vibe. However, what we haven't really scene yet with bourbon in a big way is finishing casks. Midwinter night's dram anyone? This will be the new thing to differentiate each other once all these craft distilleries start putting 8 year old bourbon and rye on the shelves. I mean think of the shelf space for a specialist bourbon liquor market in 7 years. There will probably be 700 different distillers to give space to. I think people will eat this up. Guys, I really do think we are seeing a shift in bourbon, it is happening right now, it just takes some time to get these spirits aged.

[berto]

We're not at Peak Bourbon yet. Still too many fools spending stupid money on bottles they've been told are must have. The stupid money isn't a drain on many of the people spending it. Some of them are nothing but flippers looking to trade their way to bigger deals. Others need to show off. Some actually drink the stuff and can stomach the current prices and the higher prices to come. Buying on the secondary market makes sense for these guys. Why spend hours chasing the chance to get a handful of bottles at close to MSRP when they can spend their time making money or playing golf or actually seeing their kids? $700 for a bottle of PVW15 is silly but when your hourly is in that ballpark it makes more sense to buy spend the money than spend the time.

The new guy who remembers chugging Jack in college and hears the Pappy hype goes looking and can't find Pappy. Maybe he gets sold an inflated substitute and abandons bourbon. Maybe he gets an education from a store owner or a friend and starts off slow and finds his jam. There's another customer brought in by the hype but staying. He talks up bourbon brings in more people. That local distillery gets running and people love supporting their local. Not everybody cares about age statements and the distinction between bourbon and flavored whatever it is that gets called whisky.

This isn't like flowers that die or stuffed animals that get grown out of and take up space. Folks can always drink their bourbon if they can't or won't sell it. The salty tears may make it taste like an ocean voyage and the bitterness won't be from the bottle but it'll still go down.

[dboland]

Pega, I think you make some good points. As far as I can tell craft beers really started in the 70s and 80s with the stuff coming from Anchor Steam, Sierra Nevada, Boston Beer Company, Bell's, etc. and then really took off in the 90s and 2000s. In that time, I have not seen many breweries close down despite the questionable quality of some of their offerings and I have known many people who have brewed their own at one point or another. In economics we call goods that are similar substitutes and in beer that is most of the stuff from the majors (MGD vs. Bud vs. Coors) but since they have all consolidated and bought up other brands, they each have their own lines of different types of ales, wheats, ciders, etc. I think the crafts have taken share from these to an extent but more from the imports (mostly also owned by the same bigs: AB-Inbev, Molson Coors, SABMiller).

One thing I have noticed about the "crafts" is that they have tended to keep each other in line in terms of price. Sure, there are some that are a little more expensive or special offerings but they have mostly stayed in line with each other and the reason I think is that a lot of craft beer drinkers tend to focus on what is local. A beer from a brewer in Cleveland may be great but a bar or distributor in Detroit may not want to carry it because its customers want something made down the road and their is only so much space in the coolers.

I think distilleries popping up is a good sign for consumers but I have never encountered one that was not more expensive, often significantly more, than the big brand offerings. If anything, I can see the bigs able to take more chances on stuff like LEs as most microdistilleries will probably not have the capital to commit to 12+ year timeframes on things like that or be able to store 100s of thousands of barrels of bourbon. It's a nice new thing for downtowns and some will no doubt make make great bourbon but a lot of the newer craft everythings (ice cream, coffee roasters, breweries, cheesemakers, bakeries, etc.) aren't always that great or indistinguishable as they are all trying to appeal to a similar palate. Somebody betting big on a 12-15 y/o bourbon puts them at 2027-2030 before they can release that but in that time BT has probably 200-600k or more barrels aging that they can play with and consumer tastes may have moved on to something completely different.

Edited April 30, 2015 by dboland