Booker's MSRP and allocation?

[jvd99]

2 minutes ago, lcpfratn said:

I think you hit the nail on the head. I wouldn't be a bit surprised if they announce sooner than later that they've heard the message from their loyal customers and have decided to only increase the price by a much smaller amount along with the fewer releases. In the mean time, they cleared the shelves of inventory on store shelves so they can now sell more at wholesale to reduce their own current stocks. Typical corporate gamesmanship to work the numbers for the next reporting quarter or year end, while generating some cash now to help service their debt load.


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The theory that Beam is pulling a stunt to clear shelves is interesting and has been advanced by many people.  But with a corporate entity the size of Beam/Suntory, I can't envision a situation where clearing the remaining Bookers off the shelf prior to a new calendar year would make any substantive impact on their overall bottom line.   

[jvd99]

2 minutes ago, smokinjoe said:

If folks settle to find a nice BIB to go to, Beam's got that covered.  And, a new reasonably priced Double Oak, to boot.  The last couple of years have seen them take care of the buyers of their low tier portfolio.  

Maybe that's part of their evil mater plan

[dcbt]

23 minutes ago, jvd99 said:

The theory that Beam is pulling a stunt to clear shelves is interesting and has been advanced by many people.  But with a corporate entity the size of Beam/Suntory, I can't envision a situation where clearing the remaining Bookers off the shelf prior to a new calendar year would make any substantive impact on their overall bottom line.   

True, but we know they have a huge debt load, and who knows what covenants they have with the lenders.  They might have to hit working capital or cash flow metrics by brand, for instance.  I'm not saying the theory is true or false, just saying there are scenarios where it COULD play out.

[jp_stargazer]

This is what I am currently pondering (among other things outside of the scope of this thread):

 

As many have stated, reducing the number of releases per year potentially allows the age/quality of the batches they DO release to improve.  So I am wondering, what if every single batch released from 2017 on is going to be as good as the highlight reel (2013-6, C07-B-7, other round table batches, etc.).  What if occasionally there will be higher aged batches that approach Booker's 25th in quality?  Is it worth $100 then?  I'm still not sure I'd pay that much to try, knowing in the back of my mind that the same bottle used to be $50 less.

 

Jason

[lcpfratn]

The theory that Beam is pulling a stunt to clear shelves is interesting and has been advanced by many people.  But with a corporate entity the size of Beam/Suntory, I can't envision a situation where clearing the remaining Bookers off the shelf prior to a new calendar year would make any substantive impact on their overall bottom line.   

Clearing the shelves and reducing the number of annual releases gives them future pricing power that they didn't have before. I still think the new actual selling price will end up being less than the announced SRP, but by doing it the way they have done it, they improve their odds of getting a price increase that will impact future revenue from Booker's while freeing up barrels for other uses and sales. I won't be impacted by their price increase because I've bunkered enough over the last year or so along with some additional recent purchases that I doubt I'll ever buy any more, but I am beginning to respect their tactics to get where they want to be whether I like it or not.

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[jvd99]

29 minutes ago, dcbt said:

True, but we know they have a huge debt load, and who knows what covenants they have with the lenders.  They might have to hit working capital or cash flow metrics by brand, for instance.  I'm not saying the theory is true or false, just saying there are scenarios where it COULD play out.

I love bourbon, but not enough to check out their corporate books.

[smokinjoe]

19 minutes ago, jvd99 said:

I love bourbon, but not enough to check out their corporate books.

Heehee.  Some needed levity for us all!  Well played! 

[weller_tex]

On 12/10/2016 at 5:08 PM, Spade said:

 

Is this right? Springbank 12 year cask strength is close, I think I paid $90. It's of course twice as old. Lahproaig 10 year cs is about $65 or so (owned by Suntory so maybe not for long).

 

My sense is people pay for quality, scarcity, and age. Booker's has quality but it's not scarce and it is young. $50-$55 seemed right. And for want it's worth I pass on FRPS when I see it at $65+.

Of course Scootch has to be aged longer because of the cooler weather in Scotland..but I get your point. Springbank CS 12 year to be is one of the very best single malts around. Booker's is good and was a good value at $50 because of the proof, but it wasn't a stunner (at least most batches weren't).

 

I came from Scotch to Bourbon mainly due to price..and now I am slowly going back the other way.

 

BTW, I am not mad at Beam for this per se, given the prices for other premium bourbons. However, they might turn off the average Joe that buys Beam products, and once the people with more money than brains stop spending $100 to $300 for bourbon, they may have lost a lot of the low/mid end customers.

 

 

Edited December 13, 2016 by weller_tex
added more info

[portwood]

6 hours ago, lcpfratn said:

I think you hit the nail on the head. I wouldn't be a bit surprised if they announce sooner than later that they've heard the message from their loyal customers and have decided to only increase the price by a much smaller amount along with the fewer releases. In the mean time, they cleared the shelves of inventory on store shelves so they can now sell more at wholesale to reduce their own current stocks. Typical corporate gamesmanship to work the numbers for the next reporting quarter or year end, while generating some cash now to help service their debt load.


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the bottles on retailers' shelves have been paid for and thus the revenue for Beam has already been recognized!

 

Customers clearing shelves generates revenue/cash flow for the retailer, not the producer (Beam)

 

the benefit to Beam will take a bit of time as retailers order more (to replace empty shelf) from distributor, who then order more from Beam.

Edited December 13, 2016 by portwood

[lcpfratn]

 
LOL
the bottles on retailers' shelves have been paid for and thus the revenue for Beam has already been recognized!
 
Customers clearing shelves generates revenue/cash flow for the retailer, not the producer (Beam)

Obviously you were so smart that you didn't focus on the part where I basically said clearing the retailer's shelves via this price increase announcement would enable Beam to sell more to retailers at wholesale now that their shelves are empty. [emoji6]

[Tennessee Dave]

After a lot of thought I have finally figured this out.  It's got to be the Russians.  First they hack us and determine the election outcome and now they are messing with the liquor supply.

[lcpfratn]

After a lot of thought I have finally figured this out.  It's got to be the Russians.  First they hack us and determine the election outcome and now they are messing with the liquor supply.[emoji33]

LOL! [emoji23]

[Midwest101]

1 hour ago, Tennessee Dave said:

After a lot of thought I have finally figured this out.  It's got to be the Russians.  First they hack us and determine the election outcome and now they are messing with the liquor supply.

Haha yup. Has to be a conspiracy to increase vodka sales!

[LCWoody]

2 hours ago, Tennessee Dave said:

After a lot of thought I have finally figured this out.  It's got to be the Russians.  First they hack us and determine the election outcome and now they are messing with the liquor supply.

That's funny......

[Ravensfire]

After a lot of thought I have finally figured this out.  It's got to be the Russians.  First they hack us and determine the election outcome and now they are messing with the liquor supply.[emoji33]

Those goddamned rooskies! Where's Reagan where you need 'em?

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[Kepler]

11 hours ago, jp_stargazer said:

As many have stated, reducing the number of releases per year potentially allows the age/quality of the batches they DO release to improve.  So I am wondering, what if every single batch released from 2017 on is going to be as good as the highlight reel (2013-6, C07-B-7, other round table batches, etc.).  What if occasionally there will be higher aged batches that approach Booker's 25th in quality?  Is it worth $100 then?

This is what I mentioned before.  Beam is too smart to start charging twice as much for the exact same product overnight.  I predicted that the new product will also be a move up the quality ladder, in order to at least somewhat justify the increased price.  Be careful how much you bunker (read, "hoard") now, lest you have all your cash stored up in the current "medium" Booker's, when what you really want to be drinking is the 10 year old Booker's that is more similar to 25th Anniversary Booker's.

 

Time will tell.

[flahute]

9 minutes ago, Kepler said:

This is what I mentioned before.  Beam is too smart to start charging twice as much for the exact same product overnight.  I predicted that the new product will also be a move up the quality ladder, in order to at least somewhat justify the increased price.  Be careful how much you bunker (read, "hoard") now, lest you have all your cash stored up in the current "medium" Booker's, when what you really want to be drinking is the 10 year old Booker's that is more similar to 25th Anniversary Booker's.

 

Time will tell.

I highly doubt we'll be seeing 10yr old Booker's for $100 as part of this new pricing strategy. Hope I'm wrong though. The age might creep up into the 7's perhaps even closer to 8 than we've seen lately, but I don't think 10 because 6-8 was always the target age range for Booker when he created it.

[Kepler]

3 minutes ago, flahute said:

I highly doubt we'll be seeing 10yr old Booker's for $100 as part of this new pricing strategy. Hope I'm wrong though. The age might creep up into the 7's perhaps even closer to 8 than we've seen lately, but I don't think 10 because 6-8 was always the target age range for Booker when he created it.

True, but I exaggerated to make a point.

[JoeTerp]

1 hour ago, Kepler said:

This is what I mentioned before.  Beam is too smart to start charging twice as much for the exact same product overnight.  I predicted that the new product will also be a move up the quality ladder, in order to at least somewhat justify the increased price.  Be careful how much you bunker (read, "hoard") now, lest you have all your cash stored up in the current "medium" Booker's, when what you really want to be drinking is the 10 year old Booker's that is more similar to 25th Anniversary Booker's.

 

Time will tell.

I think this is likely wishful thinking.  Beam's press release basically said that Booker's was great and should command the premium price in line with what they were changing SRP too.  I'd be surprised if there was any material change in age for Booker's, but there may be closer to 7 years.

 

More veteran members can correct me if I'm off here, but I thought Booker's 25th had a retail price around $100.  If they were to release a 10+ year old Booker's in today's market I'd have to imagine that it would be $200+ in price.

[ken_mays]

Sure, there are a lot of new consumers who will pay $100 and up for something sufficiently hyped and marketed, no matter the quality. But how many of them will buy a second bottle?  Or would they rather spend that next $100 on the next solera aged three year old craft turd? Is Beam cutting their own throat on this brand by courting the novelty seekers at the expense of the repeat buyer who shops mainly on QPR?

 

Not to say they don't have the option of dropping the price back down, but it's something to keep in mind. 

Edited December 14, 2016 by ken_mays

[SlowMash]

...More veteran members can correct me if I'm off here, but I thought Booker's 25th had a retail price around $100.  If they were to release a 10+ year old Booker's in today's market I'd have to imagine that it would be $200+ in price.

In my local stores B25th was $90 and it sat on shelves around me when it first released. I hemmed and hawed about it given how RIDICULOUSLY expensive it seemed to me at the time. Folks on here whose tastes are similar to mine said it was good, so got a bottle for a special occasion, liked it a lot (I'm generally a booker's fan for special occasions; 1-2 bottles/year, at the current $50 price point), went back a week or two later picked 2nd bottle, liked it as well....went back a few weeks after that and picked up a third as a bday gift for my best friend. Was a huge, and atypical, hit to my whiskey budget for those couple months, but I had several significant occasions to celebrate at the time and I thought they were exceptionally good bottles.


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[Charlutz]

18 hours ago, lcpfratn said:

I think you hit the nail on the head. I wouldn't be a bit surprised if they announce sooner than later that they've heard the message from their loyal customers and have decided to only increase the price by a much smaller amount along with the fewer releases. In the mean time, they cleared the shelves of inventory on store shelves so they can now sell more at wholesale to reduce their own current stocks. Typical corporate gamesmanship to work the numbers for the next reporting quarter or year end, while generating some cash now to help service their debt load.


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There is a more positive spin to the Beam announcement. The price increase has generally been characterized as a screw job on the Booker's loyalists or a means to clear shelves. I've seen the price at $70-80 in a couple stores the last few days. I drink Booker's quite a bit but it was never something I bunkered because it was always available and always consistent. The silver lining of the announcement for loyalists is that Beam did give us a chance to stock up. They didn't change the price overnight. If you like the brand and were paying attention, you are likely sitting on multiple bottles and covered for the foreseeable future. I am and I feel good about that. If the whiskey doesn't sell at the new price point and it comes back down, I won't regret the extra bottles I bought at $50. 

 

I'm not going to thank Beam for the price increase but I do appreciate that I have the chance to stock up. 

Edited December 14, 2016 by Charlutz

[Spade]

16 hours ago, weller_tex said:

I came from Scotch to Bourbon mainly due to price..and now I am slowly going back the other way.

 

BTW, I am not mad at Beam for this per se, given the prices for other premium bourbons. However, they might turn off the average Joe that buys Beam products, and once the people with more money than brains stop spending $100 to $300 for bourbon, they may have lost a lot of the low/mid end customers.

 

 

I'm the same way. When I first got really interested in whisk(e)y, probably about 80% of my purchases were scotch and 20% were bourbon/rye. For a while, it reversed and was 20% and 80%. It's probably moved closer to 50-50 in the last year in terms of dollars spent, but I  drink more American whiskey, which still has the edge in value for me because even if some (most?) of it's getting crazy, there's still incredible values like Rittenhouse, WT101, and McKenna 10 year at the moment.

[jeffrey r]

Nice, Slowmash. That's a bourbon success story. On the other hand, my local got in three bottles of the 25th at release time, that they priced at $130 or $140, and I couldn't pull the trigger as that was significantly more than the rest of you were paying at the time. In retrospect, though that was some low-level gouging, I should have picked at least a couple of the bottles. Oh well, just another bourbon opportunity missed.

[DonutsNBourbon]

yikes, the scare/hype is real, went to a couple LS where booker's used to be plentiful, and the shelves are empty.  It was plentiful at Binny's last week at $47 too