A Bourbon Conundrum?

[The Black Tot]

I cleared a few shelves in my day.

 

Don't regret a single one.

[mosugoji64]

3 minutes ago, The Black Tot said:

I cleared a few shelves in my day.

 

Don't regret a single one.

 

I can only hope it was accompanied by the requisite crotch shots! 

[DCFan]

5 hours ago, smokinjoe said:

Until these numbers reverse, the boom is not over:

Case closed, end of subject. It boggles my mind that anyone who spends even a modicum of time here and reads day after day of allocations, shortages, rising prices, the NAS trend, lotteries, and LS owners joining the flipping secondary market. We haven’t even come close to reaching the peak.

[PaulO]

6 hours ago, Charlutz said:

... 

 

I guess that’s not a perspective on whether the boom has peaked but rather one man’s opinion that I’ve found peace in not playing the game anymore. 

Yeah Charlie, I'm right there with you.

Over the years I gradually collected a bunker of discontinued/can't be replaced bottles.

Also keep a mixed case with stuff I don't worry about opening.  Right now, in there: WT 101, FR SmB, VOB BIB, and EW BIB.  Open in the cabinet is a handle of MM.  

I will still hunt dusties, but they had better still have the original dusty price tag too.

[PaulO]

submitted twice

Edited December 25, 2018 by PaulO
submitted twice

[flahute]

21 hours ago, Surtur said:

I totally think it has peaked, and I’ve been quite adamant about that for a while now. I find it comforting that every store has every LE at stupid prices- nobody is going to buy them anymore. Then next year when stores still have last year’s and the year before’s PVW shelved for $1000+ a piece, they lose interest in grabbing them because they aren’t selling. A store I used to trust a lot has all the BTAC for $700-$1000 each and 2018 Birthday bourbon for $800.

Those aren't selling because they are way above secondary market value. I wouldn't use this as an indicator that we've reached the peak.

[The Black Tot]

13 hours ago, smokinjoe said:

Until these numbers reverse, the boom is not over:

 

Sales of American whiskey grew 8.1 percent in 2017, jumping $252 million to $3.4 billion, according to the Distilled Spirits Council. Total sales outpaced sales of other adult beverages in the same year, including tequila, cognac and Irish whiskey.

 

There is always the temptation to confuse the shenanigans of the “bubble”, and its focus on secondary markets, limited edition pricing and availability, one’s personal position and opinion thereof, etc, with the actual realities  

of the continued “boom” growth of bourbon.  The “boom” is still very much alive.  

Gotta be careful with sales figures expressed in money...

 

Starbucks' revenue was up this year over last, but less drinks were sold. They just raised the prices of each drink significantly. Although sales are up, that's a decline in consumer activity.

 

"Sales" in dollars can go up even if consumption is flat or slightly going down. We all know that prices per bottle of bourbon are going up.

 

Bottle count sales are a better indication. 

[The Black Tot]

...not to mention those numbers are 2017 sales vs 2016. Which, if we're evaluating the peak at the very end of 2018, are old numbers now.

[smokinjoe]

1 hour ago, The Black Tot said:

...not to mention those numbers are 2017 sales vs 2016. Which, if we're evaluating the peak at the very end of 2018, are old numbers now.

Noted, Paul.  Of course, that is last full year numbers available.  Here is some additional volume data.  It should also be noted these are for American Whiskey, not just bourbon, but it again shows substantial increased growth in case sales:

https://www.distilledspirits.org/wp-content/uploads/2017/12/American_Whiskey_2017.pdf

Edited December 25, 2018 by smokinjoe

[El Vino]

Continuing on a point made earlier in the thread.  Something always has to be the “thing.”  Until a new “thing” comes along, I am afraid the chasers of “things” will skew the balance of supply and demand - and therefore pricing.  For a while I thought super premium tequila was going to be the new “thing” but it kind of fizzled out.  Anthony Bourdain and Robert Parker got their legions chasing Pappy.  Hope the next “thing” comes along soon...

[The Black Tot]

3 hours ago, El Vino said:

Continuing on a point made earlier in the thread.  Something always has to be the “thing.”  Until a new “thing” comes along, I am afraid the chasers of “things” will skew the balance of supply and demand - and therefore pricing.  For a while I thought super premium tequila was going to be the new “thing” but it kind of fizzled out.  Anthony Bourdain and Robert Parker got their legions chasing Pappy.  Hope the next “thing” comes along soon...

Tequila has suffered in recent years from speculative agave pricing. If history repeats itself it should stabilize in 2yrs or so and then, who knows? I would certainly welcome a new wave of nicely aged sipping tequila.

[Charlutz]

14 minutes ago, The Black Tot said:

Tequila has suffered in recent years from speculative agave pricing. If history repeats itself it should stabilize in 2yrs or so and then, who knows? I would certainly welcome a new wave of nicely aged sipping tequila.

 

I’m new to tequila. How old has any distillery gone with tequila? I think even the anejos are only aged about a year. To me, that’s one of the reasons other spirits and beers don’t catch on with the same intense hook of whiskey. Distillers and brewers can easily catch supply up to demand because they don’t have the 5-10 year aging and trial and error process to overcome. They can make good tequila, beer, wine or clear spirits in a couple of years and demand doesn’t have a prolonged period to go unsatisfied and build to a fever pitch. 

[jshleffar]

1 hour ago, Charlutz said:

 

I’m new to tequila. How old has any distillery gone with tequila? I think even the anejos are only aged about a year. To me, that’s one of the reasons other spirits and beers don’t catch on with the same intense hook of whiskey. Distillers and brewers can easily catch supply up to demand because they don’t have the 5-10 year aging and trial and error process to overcome. They can make good tequila, beer, wine or clear spirits in a couple of years and demand doesn’t have a prolonged period to go unsatisfied and build to a fever pitch. 

I may be way off base here, but I believe the issue is the agave plant itself and it taking 10ish years to be mature enough to harvest. Not the aging process in barrel.

[flahute]

1 hour ago, jshleffar said:

I may be way off base here, but I believe the issue is the agave plant itself and it taking 10ish years to be mature enough to harvest. Not the aging process in barrel.

This is correct.

[fishnbowljoe]

2 hours ago, jshleffar said:

I may be way off base here, but I believe the issue is the agave plant itself and it taking 10ish years to be mature enough to harvest. Not the aging process in barrel.

 

45 minutes ago, flahute said:

This is correct.

I remember seeing a tv news story about this a while back. IIRC, some land owners were replacing their agave crops with corn. At that time, it was projected that over time, corn was the more lucrative crop. This is the main jist of that story, although there was a bit more to it than that. 

[Charlutz]

3 hours ago, jshleffar said:

I may be way off base here, but I believe the issue is the agave plant itself and it taking 10ish years to be mature enough to harvest. Not the aging process in barrel.

Thanks for that. Had no idea. I still haven’t seen the sustained intensity or hook with other beers or spirits as with whiskey, but I’ll have to keep searching for the reason. Cheers!

[mbroo5880i]

Another observation of bourbon being a "thing" even when people don't know what that "thing" is. 

 

This year our division managers, who are a self-proclaimed "bourbon guys," gave us a really nice decanter and glass set engraved with our company's logo and commemorating our plant's 15th anniversary.  It is really nice and even with a volume discount (several hundred) probably cost $50 per set.   When I asked various people what they were going to put in theirs, they told me bourbon.  When I inquired what kind of bourbon, most said they weren't sure since they didn't know much about bourbon.  When I told them decanters could be used for other types of alcohol besides bourbon, they seemed surprised.  When I spoke with the managers to thank them, I inquired what kind of bourbon they drink.  Most have only tried one or two brands - Makers, Knob Creek.  Which is fine.  It just makes me wonder what attracted them to the concept of giving a decanter set.  I made a joking suggestion they should arrange for a barrel purchase to fill the decanters.

 

I just found out yesterday, the group (divisions make up a group) managers at another (larger) group did something similar.  They gave certain employees engraved bottles of Woodford Reserve.  I am not sure who got a bottle, a specific division or department.   What I did notice is that when one of the managers posted a picture of the bottle on Facebook, the "I want one" and "this stuff is great" posts soon followed.  We have all seen these when liquor stores post special events or availability of new bottles.  There is nothing wrong with this.  It just caught me as interesting that this phenomenon has now carried over into a corporate setting.  I can't help but wonder as well, how many recipients really knew what they got or whether those inquiring or commenting really knew what they were inquiring or commenting on.  Another example of bourbon being a "thing" without people not necessarily knowing what that "thing" is.  

[El Vino]

5 hours ago, The Black Tot said:

Tequila has suffered in recent years from speculative agave pricing. If history repeats itself it should stabilize in 2yrs or so and then, who knows? I would certainly welcome a new wave of nicely aged sipping tequila.

Your comments on T1 Anejo Estelar lead me to a new favorite Anejo.  Sadly, nearly impossible to find in NJ.  So, I too would welcome that new wave.

[The Black Tot]

6 hours ago, Charlutz said:

 

I’m new to tequila. How old has any distillery gone with tequila? I think even the anejos are only aged about a year. To me, that’s one of the reasons other spirits and beers don’t catch on with the same intense hook of whiskey. Distillers and brewers can easily catch supply up to demand because they don’t have the 5-10 year aging and trial and error process to overcome. They can make good tequila, beer, wine or clear spirits in a couple of years and demand doesn’t have a prolonged period to go unsatisfied and build to a fever pitch. 

Fonseca I believe it was did a 14yr tequila once. And I have an 8, but that isn't the norm.

 

Yes, they're calling it extra anejo by 3-4yrs. AND it's delicious as a sipper at that point if done well.

[The Black Tot]

The consensus appears to be from a quick read around the internet that agave supply will loosen in 2021. In a few days it's 2019, so for whiskey drinkers, 2yrs isn't exactly a punishing horizon.

 

I can still get decent reposado for cocktails very cheaply.

[The Black Tot]

Lest we forget the growing acceptance and legality of marijuana. You can even make your own.

 

It seems every election we add a state or two.

 

Whiskey merchants and bars had better be careful how hard they gouge their next generation of customers, while they are still malleable and deciding what their lifestyle intoxicant of choice is going to be.

[The Black Tot]

14 hours ago, smokinjoe said:

Noted, Paul.  Of course, that is last full year numbers available.  Here is some additional volume data.  It should also be noted these are for American Whiskey, not just bourbon, but it again shows substantial increased growth in case sales:

https://www.distilledspirits.org/wp-content/uploads/2017/12/American_Whiskey_2017.pdf

 

Always enjoy these statistics. The numbers on this sheet here say that while sales growth may be 8.1%, case shipment growth is less than that at 6.4%. Still a very substantial increase, and given that the numbers get larger every year, percentages may not be the best way to do it. Year-over-year case change would be better still.

 

It will be interesting to see the 2018 sales numbers now that so many of people's brands have hit the walls of allocation. It will also be interesting to see if the increase in whiskey came at the expense of a decrease in another spirit. If not, either we're drinking more as a nation, although you and I visited this question once before and the consumption rate was pretty stable as far back as records went. I still think people are building, while not sb.com-style bunkers, at least home bars with more choices than previous generations - ie people buying more than they're drinking and building home inventories are part of the boom AND bubble at the present stage.

 

From the date at the bottom of the document it looks like these results come out in Feb so we don't have too long to wait for some amusing number-crunching.

Edited December 26, 2018 by The Black Tot

[PaulO]

Here's an observation that may be related to all this.

I can think of two Indy area stores that go out of their way to have a large selection of different bourbons.  I find myself looking at a literal wall of bourbon bottles - with nothing there interesting enough to buy.  A lot of it is non distiller produced brands.  Most of it has no age statement (unless it indicates less than four years).

[Jazzhead]

For me,  a lot of the fun of the hobby has been to find truly quality examples of bourbon produced by craft distillers.  There are a lot of misses to be sure,  but they're balanced out by the successes,  which are increasingly the result of time - many craft distillers are not putting out straights,  and a few even bonded products.

 

Increasingly,  the little guys are putting out aged bourbon that can compare with the big boys,  and which can boast of such innovations such as local grains,  pot still distillation,  truly small batching, blending and experimentation in mashbills.

 

Examples of great craft bourbons I've discovered in the last year or so include Wyoming Whiskey's Outryder (a bonded blend of bourbon and high-rye four grain) Dad's Hat (now available in both straight and bonded versions, both aged in full-size barrels),  Black Dirt Straight Bourbon (from the Hudson River valley)  David E Straight Bourbon (Hidden Still Spirits)  MB Roland (a barrel proof straight  that was the hit of our Christmas party),  and JP Trodden.

 

Here's to the New Year and more discoveries!

 

[Surtur]

On 12/25/2018 at 12:05 AM, flahute said:

Those aren't selling because they are way above secondary market value. I wouldn't use this as an indicator that we've reached the peak.

 

In the here and now yes, but big picture? The market becomes flooded with limiteds beyond prices most people will pay, and those consumers find out there’s a lot to drink in the $20-$50 range. The urge to hunt for Pappy will die down when more and more newer drinkers see them in stores for $1000 plus a bottle and just write them off as unattainable. Let’s not forget the role social media had in this boom, and how quickly gossip spreads nowadays