After the boom

[FasterHorses]

It seems like every week Im getting inundated with emails touting the new “Limited Edition” for $150-$400...PegLeg15, Calumet, Sweetens Cove, Par, Pogue, Lone Whisker, Fourgate for example..This is not sustainable over the long term in my opinion. What does the landscape look like after the boom is over? I know we have the thread about predictions of WHEN  the boom will be over but I was wondering WHO and WHAT will be able to maintain their status in the premium market..and will be able to continue to demand higher prices even in a down market. 

[Kepler]

Interesting topic for a thread.  Although there will always be a place for alternative boutique brands, I just don't see how the Johnny Come Lately craft brands survive the first wave of the crash. A handful of exceptions of course will survive as the best of their breed. I'm just stating the obvious here and look forward to more opinions that go deeper.

Edited November 15, 2020 by Kepler

[Kepler]

Consolidation is also a constant with these type of things. I wonder which of the big boys would be most ripe for acquisitions.

[FasterHorses]

Kepler.. i lucked into a couple Jo Magnus Cigar Blends and started thinking about this. I think it will partly  come down to a substance over style. I really think and hope Magnus will still be there with that offering just because of what we know Nancy invests in it. I dont know enough about some of the others I listed but I doubt Peyton Manning puts in the work that Nancy does for example.. (i realize peyton has admitted as much)

[PaulO]

This is just an observation.  People that try the brands Nancy produces (blends) seem to want to become repeat customers.

A lot of the other stuff mentioned in the original post, may be OK sourced barrels, fancy package, big price.  I'm not sure how sustainable that is.

I say the same for a lot of the "craft" distilled whiskey.  If the quality and value are not there, I don't see how they stay open long term.

On the other hand, with the boom over, legacy distillers may be willing to sell better or more aged barrels to NDPs.  Maybe legacy distillers will bring back age statements on labels, or offer honey barrels in selection programs  of their own.

 

[Saul_cooperstein]

For LE bottles I suspect that things will follow the market for CA cult Cabernets and mailing list wines.
 

1) You will have a limited number of leaders that continue to deliver a secondary market premium no matter how high they price on release (think PVW/BTAC and for wines Screaming Eagle).

 

2) You will then have an underclass of whiskies that were once high flying (or thought they were high flying) but over time have priced themselves beyond market that will sit on shelf (for wines think Harlan, Bryant Family).

 

3) Third you will have a group of great LEs that raise their prices slowly so that they also retain value versus market pricing and retain a loyal fan base without becoming truly sought after or dismissed for pricing (for wine think Sine qua Non).

 

4) Lastly you will then have a small number of newer up and comers that deliver truly exceptional product that can sustain pricing power over an intermediate period before moving into one of above categories (for wine things like McDonald, Myriad, Maybach on the wine side). 

[geclbxf]

6 hours ago, Saul_cooperstein said:

For LE bottles I suspect that things will follow the market for CA cult Cabernets and mailing list wines.
 

1) You will have a limited number of leaders that continue to deliver a secondary market premium no matter how high they price on release (think PVW/BTAC and for wines Screaming Eagle).

 

2) You will then have an underclass of whiskies that were once high flying (or thought they were high flying) but over time have priced themselves beyond market that will sit on shelf (for wines think Harlan, Bryant Family).

 

3) Third you will have a group of great LEs that raise their prices slowly so that they also retain value versus market pricing and retain a loyal fan base without becoming truly sought after or dismissed for pricing (for wine think Sine qua Non).

 

4) Lastly you will then have a small number of newer up and comers that deliver truly exceptional product that can sustain pricing power over an intermediate period before moving into one of above categories (for wine things like McDonald, Myriad, Maybach on the wine side). 

Excellent thoughts and examples.   Really got me thinking.   TY

[Jazzhead]

An interesting case study may be High West, which started out with a meritorious Big Idea -  well-crafted,  premium packages of blended bourbons and ryes,  with the provenance of the blends revealed, more or less.    Then,  as that Big Idea was adopted by others,   and quality sourced barrels became harder to find,  their blends inevitably changed.    Moreover,  their blends were always seen as a stepping stone to their own distillate,   but that distillate has been merely integrated into their blends rather than sufficiently aged  and presented so as to acquire a good reputation  on its own, like New RIff's has.    (Smooth Ambler tried do that,  but their distillate revealed itself as not ready for prime time.)

 

So what's the road ahead for High West?   They've been bought up by a big drinks conglomerate,  so they have the money,  I presume, to choose their own direction.  Will it be the right one?    Are they a distiller or a blender?   If the latter,  can they re-axquire their cachet for quality that they once had?  Smoke Wagon proves it can still be done.  Over in the world of scotch,  Compass Box has proved that a business built on quality,  transparent blending can be a sustained success.    Can High West (or Magnus or Smoke Wagon) follow?     

Edited November 16, 2020 by Jazzhead

[BigRich]

Ultimately, I think you have:

1) a relatively few number of "new" survivors

2) a larger but still modest number of brands with decent following that get acquired by other players (that's how Heaven Hill and Diageo got where they are)

3) a bunch of companies that go out of business like the flash in the pan that they were. 

 

The plethora of LE's will definitely contract as the number willing to pay that much of something moderately different from a regular bottle tanks.  Now when is really the question for all of this.

[Mattk]

The boom ends not by a self regulating market, but rather by a catastrophic event. Only small patches of humanity remain. Home stills are the only source for new whiskey. It is often used as currency.

[mal00768]

On 11/16/2020 at 4:22 PM, Mattk said:

It is often used as currency.

I'm rich!