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Bbstout

Your Ongoing observations for the Upcoming Glut

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Bbstout

I have been on  SB for around 15 years (some as a lurker) one of my favorite threads is the ongoing observations of when the boom will end. I have asked alot of questions over the years and have received invaluable information. I thought I would finally contribute to what I think is an important thing to remember. The Glut is coming. My reasoning is this...I recently spoke with an old friend that used to work at a liquor store in the same college I went to in the early 90's. He used to sell cheap bottom shelf bourbon to my friends. Around 1985... WT 101. This same bottle sells for around $350 secondary in 2020. We used to chug it and mix with coke. I would go home and snag bottles of Weller from my old man and bring to a party and set it on the table for friends to mix with coke. The Glut is coming my friends. I want to hear your guesses....2021 or 2035? What do you think and provide backup. I want to hear from the old timers who have forgotten more about bourbon than I know and everyone else. 

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Richnimrod

OK.   I'll take a stab or two; but note this disclaimer first: I AM an 'Old Timer', and HAVE forgotten more about . . . EVERYTHING (and the drain continues unabated)... so there's that.

 

My prediction of the beginning of the "glut" is about 2024 sometime; but, it may not be recognized before a year or more into it, and may not be obvious in all regions for another year.    My reasoning is mainly about the finite amount of storage space in Mr./Mrs. Everybody's home; not to mention the eventual realization that stretching a budget to garb more and more Bourbon (that is no longer garnering the interest it may have a few years prior) just isn't sustainable.   Combine that with the massive increases that have been seen in distillation and aging capacity throughout the Bourbon business in the last 4-years (and the increase continues unabated!), and a tipping point just can't be much farther away than this.   Also, let's not forget the buying public's fascination with, and lust for "The Next Shiny New Trend" in spirits....whatever that may be.   If this new trend doesn't empty some of the bourbon barrels that have been laid down during the last few years, and the next few... well then; there you have it!   If that siphons off even 20% of the current Bourbon demand for longer than a year or two: GLUT CITY!

 

This isn't to say prices will come crashing down, nor that availability will become universally wide and deep for favored brands and LE's.    The manufacturers have seen clearly how deprivation can and will build demand, and therefor support prices above the give-away levels of the 80's and even the 90's.    So, they'll be careful about flooding any market with a brand whose price can be better supported by withholding some by area and/or quantity, timed and limited distribution, and planned 'brief' area shortages (even though plenty exists nationally).    So some areas/regions may not be aware of a glut, while others might see it plainly, at least for some brands for some period of time.   All this will moderate the "publicly-felt" onset of the glut and mitigate the actual oversupply for awhile.   This may eventually allow the distilleries (the big boys anyway) to limit or extend over time their over-supply issues, while production is moderated.   Sooner or later though (maybe around 2030) the leveling that must eventually happen should begin to even force moderation in pricing, for at least some large volume brands that don't traditionally have the cachet of mid and higher end brands.    BUT, note that when I say 'moderation in pricing', I don't necessarily expect many brands to take a significant price drop.   Rather, I see slowing or even forgoing the increases that might otherwise be expected through continuing inflation to eat up a good deal of the 'moderating'.

 

So there ya' go!

 

Check with me in about 10-years, and I'll claim to remember posting NONE of this!  Heeee-He!

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Bbstout
1 hour ago, Bbstout said:

I have been on  SB for around 15 years (some as a lurker) one of my favorite threads is the ongoing observations of when the boom will end. I have asked alot of questions over the years and have received invaluable information. I thought I would finally contribute to what I think is an important thing to remember. The Glut is coming. My reasoning is this...I recently spoke with an old friend that used to work at a liquor store in the same college I went to in the early 90's. He used to sell cheap bottom shelf bourbon to my friends. Around 1985... WT 101. This same bottle sells for around $350 secondary in 2020. We used to chug it and mix with coke. I would go home and snag bottles of Weller from my old man and bring to a party and set it on the table for friends to mix with coke. The Glut is coming my friends. I want to hear your guesses....2021 or 2035? What do you think and provide backup. I want to hear from the old timers who have forgotten more about bourbon than I know and everyone else. 

I need to clarify something. The WT was 8 years old. I was in college in 91'  so that would make it 83'. So probably $400 secondary. Damn I am old.

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Kepler
4 hours ago, Bbstout said:

I have been on  SB for around 15 years (some as a lurker) one of my favorite threads is the ongoing observations of when the boom will end. I have asked alot of questions over the years and have received invaluable information. I thought I would finally contribute to what I think is an important thing to remember. The Glut is coming. My reasoning is this...I recently spoke with an old friend that used to work at a liquor store in the same college I went to in the early 90's. He used to sell cheap bottom shelf bourbon to my friends. Around 1985... WT 101. This same bottle sells for around $350 secondary in 2020. We used to chug it and mix with coke. I would go home and snag bottles of Weller from my old man and bring to a party and set it on the table for friends to mix with coke. The Glut is coming my friends. I want to hear your guesses....2021 or 2035? What do you think and provide backup. I want to hear from the old timers who have forgotten more about bourbon than I know and everyone else. 

 

Why not just post this in the existing thread you referenced.  Simpler.

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Kepler

I think the boom will bust (with a glut following a few years after that, if there is a true glut) a long time from now.  Too many new people every day just getting interested.  Every day it keeps growing.  Check out your local facebook bourbon groups if you don't believe this. It's not quite even hitting the mainstream yet, but getting closer.

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Bbstout
15 minutes ago, Kepler said:

 

Why not just post this in the existing thread you referenced.  Simpler.

It's a different discussion. We all have different tastes. You might like tube amplifiers and I like solid state. You like reel to reel and I like Vinyl.

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Kepler
2 minutes ago, Bbstout said:

It's a different discussion. We all have different tastes. You might like tube amplifiers and I like solid state. You like reel to reel and I like Vinyl.

Ok, I get you.  Although just a different side of the same coin.  Actually right  now I go with tube preamp with SS amps 😀

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The Black Tot

Well...you knew I'd be around sooner or later...

 

Basically, you count about 7 years from the capacity expansion dates.

 

I don't have them all to hand at present, but I like to use BT because they were among the last to admit they had to expand, and then they went BIG. 

 

Since their last major bottleneck was their fermenting tanks that went in this summer, 2019 is the first season of large batch wheaters, and eventually large batch mashbill no 2.

 

So if non-age stated OWA is guessed to be 6yrs old, then OWA starts spiking up in 2025.  If you think ETL is of a similar age, then that returns in 2025 as well. Blanton's probably a year or two later, RHF another year or two after that (based on anecdotal age assumptions).

 

However, I agree with Rich, in the sense that well before that, we're going to see major upswings in almost every other company first, which are going to have a serious effect on the market.

 

The mid-shelf excellent drinking ~7yr products should start swamping the market in about 2023, from almost every major distillery except for BT and 4R (4R doesn't really have the same scale of operations in order to ramp up like the bigger distilleries. Their expansions are significant, but dwarfed by the likes of Beam, HH, BF, and WT). The new generation of supertaters might be able to absorb the first waves, but this won't last long. There's just gonna be too much of it. At this stage we can expect to see high-7-to-8yr Booker's again. 

 

And yes, at this point, price pressure will ease. Oversupply necessitates that. It can't sit on the shelf, it has to be moved. Whiskey is still profitable at 1/3 of the present pricing, so there is lots of room for discounting. And once the first big distillery does it, all of them will be forced to follow suit.

 

This won't help the limiteds, which for the most part involve whiskey over 10, 12, and sometimes 15 and 17 yrs old. But we'll see the step changes as time goes on. The 10yr ORVW type stuff or 10yr Booker's limiteds will start to be a high-volume option in 2026 (Beam) and probably 2030(BT), since not much of the 2026 OWA surge will be left to age to 10yr - it's all going to get snapped up.

 

But I think the best takeaway is that your everyday high quality top shelf staples like Stagg Jr and Booker's should be back available, aged more like historical averages, and back comfortably priced by 2023, and every year after that for a good long time. The mythical quests for ETL and Blanton's will be over, and the rack houses will runneth over with great barrel pick opportunities.

 

I don't want to push the limits of the non-politics section so I won't mention other factors that could change the economy significantly in the coming years. Y'all can read the news.

Edited by The Black Tot
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Bbstout
3 minutes ago, Kepler said:

Ok, I get you.  Although just a different side of the same coin.  Actually right  now I go with tube preamp with SS amps 😀

Agreed. I have a modest system. Spinning moving pictures tonight in memory of Neil Pert. My newest toy is the reel to reel Pioneer. The sound blows me away.

IMG_20200111_002644909.jpg

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Kepler
4 minutes ago, Bbstout said:

Agreed. I have a modest system. Spinning moving pictures tonight in memory of Neil Pert. My newest toy is the reel to reel Pioneer. The sound blows me away.

 

Maggies?  Nice

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flahute
49 minutes ago, The Black Tot said:

Well...you knew I'd be around sooner or later...

 

Did Bbstout consult you before starting this thread? LOLOL.

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Bbstout
47 minutes ago, Kepler said:

Maggies?  Nice

This is way off topic but I used to roll kegs in an  abanded field in White Bear Lake MN close to where Maggie's are  made.

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PhantomLamb
7 hours ago, Kepler said:

Ok, I get you.  Although just a different side of the same coin.  Actually right  now I go with tube preamp with SS amps 😀

Amen to that. Can’t replicate that warmth. Curious when bourbon will go mainstream before this supposed glut. Can’t be too much further off, 5 years?

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BottledInBond

When will the glut come? I can’t remember who said this but I think it was maybe Cowdery? In reference to the long discussed and still theoretical American whiskey significant growth in the Asian markets: If bourbon never catches on in Asia we will have made too much. If it does catch on in Asia we will not have made enough.

 

I do think foreign markets have the ability to have a major impact on whether or not there is a glut. I mean, the American population is dwarfed by China alone in addition to the rest of the Asian countries. And for now there still doesn’t seem to be huge momentum there beyond Japan. So if it ever really takes off there, the potential volume could be crazy.

 

I also wonder what effects tariff wars will have on international markets? It could go both ways. If we keep paying more and more for Scotch because of tariffs will that eventually push even more people to bourbon here? Could China placing tariffs on American whiskey prevent the huge growth potential there from taking off as much as some have anticipated? 
 

Only time will tell on all this stuff and I’m not so convinced that a glut is coming quickly that I’m not worried about having an ample bunker for now. Prepare for the worst and hope for the best. 
 

 

Edited by BottledInBond
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GeeTen
49 minutes ago, BottledInBond said:

When will the glut come? I can’t remember who said this but I think it was maybe Cowdery? In reference to the long discussed and still theoretical American whiskey significant growth in the Asian markets: If bourbon never catches on in Asia we will have made too much. If it does catch on in Asia we will not have made enough.

Oh, I don't know about Asia in general, but I do know there's a significant Chinese market for bourbon in Beantown.  And it ain't just me!   ☺️

 

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wadewood

Actual case sales of American whiskey are up about 18% over the past 10 years according to numbers I dug up through DISCUS reports.  This does not sound like much but when are dealing with a product that takes 6-8 years to be ready, it has caused the shortage we see now.  If only one large producer had gone through a major expansion, then things would balance themselves out in a few years.  The problem is every single major producer has about doubled production each thinking they will be the one to capture this growth.  Then on top on that you have all several new distilleries of decent size in KY built and 1000's of craft distilleries across the US.  It really does not take a rocket scientist to see the next glut is coming.  

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The Black Tot
21 minutes ago, wadewood said:

  It really does not take a rocket scientist to see the next glut is coming.  

 "This time it's different." :)

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Kepler
21 hours ago, Bbstout said:

This is way off topic but I used to roll kegs in an  abanded field in White Bear Lake MN close to where Maggie's are  made.

I didn't realize maggies were made in MN.  I appreciate that my arc pre was made there.  Minnesota must be a hotspot for that kind of thing.

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The Black Tot
1 hour ago, Kepler said:

I didn't realize maggies were made in MN.  I appreciate that my arc pre was made there.  Minnesota must be a hotspot for that kind of thing.

 

Indoorsy winters...

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Harry in WashDC

IIRC, over on the "has it peaked" thread some months ago, some of the discussion addressed the state of other spirits and alcoholic beverages in order to assess the effect of the "shiny object" attraction.  A few days ago (3 Jan 2020), the WashPost's wine columnist, Dave McIntyre, commented on an upcoming annual report by Rob McMillan, the wine market sector analyst for Silicon Valley Bank (subsidiary of SVB Financial with HQ in Santa Clara, Cal., but offices across the US).  Apparently, excellent growing seasons recently produced good and plentiful grapes just as the craft spirits and spiked seltzer markets started growing.  Anecdotal evidence suggests that the growing marijuana markets are also having an impact.  Hence the domestic wine market is moving sideways. Unfortunately, the article does not discuss relative volumes so I couldn't get a sense of just how "big" those craft spirits and seltzer markets are compared to the more traditional producers' shares OR how fast they are growing.

 

As in the craft beer market, consolidation is taking place with small producers being squeezed and larger ones realigning.

 

For further reading - https://www.washingtonpost.com/lifestyle/food/grape-growers-felt-the-squeeze-in-2019-and-2020-looks-no-friendlier/2020/01/03/f58a9d96-2d6e-11ea-bcb3-ac6482c4a92f_story.html

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The Black Tot

Interesting article. Looks like some deals coming down the tracks on California wines. All we need now is an overproduction of grass-fed beef and I'm in for a great year.

 

I didn't realize Dry January was such a big thing, despite the fact that one of my friends is doing it. I'm doing it too, but not by freakin' choice!!!

 

Never heard of White Claw. I'm getting the sense that's for the best. 

 

Julian VW said several years ago that the marijuana market could derail the relevance and profitability of a whiskey production increase. Most people dismissed his comment at the time. Wine ain't cheaper than whiskey, but marijuana is. And younger generations haven't had the benefit of Reefer Madness to warn us all of its pernicious pitfalls. Every election for the last few, a few states go green.

 

What appears to be clear is there are lots of choices rising in supply for how to have fun on a Friday (Tuesday?) night. Not all of 'em can be winners at the same time. 

 

I can confirm that absolutely none of them are on this damn boat.

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Harry in WashDC
1 hour ago, The Black Tot said:

   *  *  *  *  *

 

I can confirm that absolutely none of them are on this damn boat.

I can confirm that beer, wine, and several kinds of distilled spirits are available at hand OR on in an other room or two near me.  AND, speaking of competition for the consumers' alcohol palate, Wife is lobbying for me to pick up a couple of canned cocktails so she can try them.  Who am I to tell her "No" as they are sold in liquor stores where one finds bourbon.  Dry January?  Not in MY house.:P 

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Vosgar
2 hours ago, Harry in WashDC said:

Anecdotal evidence suggests that the growing marijuana markets are also having an impact.

So.........since Illinois made weed legal this year, I shouldn't have any problem finding GTS and WLW on the shelf next fall, right? :D

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fishnbowljoe

I find it interesting that there is a glut of grapes/wine despite all the wild fires in CA two out of the last three years. And yes I know that there are many other areas of the country that have grapes and produce wine.

 

Joe

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Harry in WashDC
4 minutes ago, fishnbowljoe said:

I find it interesting that there is a glut of grapes/wine despite all the wild fires in CA two out of the last three years. And yes I know that there are many other areas of the country that have grapes and produce wine.

 

Joe

Even before I saw the McIntyre article, I'd been surprised by how STABLE the prices for some of our favorite California wines have been in spite of the fires.  Over the last five years or so, we switched allegiances from some Napa faves to Sonoma (although from the same producers) as quality and consistency from Sonoma moved up, and the Napa expressions got harder to find. 

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