Tuesday, May 27, 2014

Boozepocalypse! Will There Be a Whiskey Shortage?

posted by Winston Smith at 2:17 PM

4 Comments:

Anonymous Anonymous said...

And their advice for coping is basically "hoard". Helpful.

If you look at the statement coming from Buffalo Trace, it actually indicates most of the spike in demand is coming at the "premium" level. No surprise there, since most of the increase in demand is a result of fashion, rather than an increased appreciation for the thing itself. The downside to this is that the Pappy Van Winkle is now impossible to find unless you are one of the rich idiots who made it hard to find, but there are upsides:

The liquor marketing people, who know their customers very well, can satisfy much of the rich idiot demand with "limited edition" bottlings with cut glass bottles, silver horse head stoppers, &c., soaking up the these dollars without diverting too much of the good whiskey. This is what Johny Walker did with the Blue Label, and it worked marvelously. In a couple of years, you can walk past the $200 Buffalo Trace Fund Manager's Delight happy in the knowledge that the 1000% margin is helping to keep $25 quality bourbon available.

Non-premium whiskey in the US is far from terrible. It's a little sad to see this panic statement coming from Buffalo Trace, since they have always been right at the inflection point where additional cost stops resulting in significant improvements in quality. But even so, the other inflection point, where a little cheaper drops fast into true rotgut territory, is really quite low. Before you get to Distiller's Pride (with the little fusel oil sheen floating on top) at $6.50 a fifth (!!) is plenty of non-wretched stuff, from Wild Turkey through Fighting Cock, which will make a fine old fashioned.

And speaking of: Cocktail snobbery, though at root as dumb as any other kind, requires of the practitioner that he learn how to do something, then talk about how great it is, rather than just buy something, then talk about how great it is. A shortage of "premium" whiskey might encourage the RI contingent to demand better cocktail mixing, since they can't just count on ordering an expensive whiskey for cache. This increased demand would be for skilled labor (knowledgeable bartenders) rather than for capital (distilleries and brands), which is a good thing all round.

The federal aging requirements on whiskey are arbitrary and outdated. The feds should ensure truth in labeling, that's all. Until now, the big distillers have been content with these requirements, since the aging requirements make it very difficult for a new distillery to get going and are en effective barrier to competition. If a sudden spike in demand forces big distilleries to lobby for the elimination of aging requirements to meet it, then we'll get that change and life will be easier for new distilleries in the future.

With demand so high at the premium level, it will be easier for whiskey startups to find capital. Sure, the bubble will pop when billionaire Chinese bureaucrat billionaires discover Ouzo or something, but by then the costs will be sunk. The distillery will be built and the stuff in the barrels.

The upshot for me is that this terrifying shortage is mostly terrifying if you are a Digeo executive, facing the thought of all that RI money not being gotten without somehow losing control of the supply. For we the drinkers, there is no reason to panic, and the whole situation may benefit us in the long run.

Don't hoard.

4:11 PM  
Blogger Winston Smith said...

Whelp, that's interesting, and it sounds like you know what you're talking about...

Thanks for it...I had been having the following internal dialog:

*Maybe I should hoard...no, that's bad...but maybe I should anyway...no, I can learn to drink vodka or some shit...but whiskey...hoarding is bad...* Etc...

"RI" contingent means...?

Glad to hear/hope you're right that it's mostly at the high end... I mostly drink at the middle end, as it were, with Buffalo Trace (and Eagle Rare) making me more than happy.

Actually, I've also been very content with Rebel Yell of late, which is downright affordable... So anyway, there's my attempt to establish non-snob cred...

To riff on something you mention: I do hate what I think of as the Expertise Fad. It used to be that people sometimes knew some stuff about stuff...I mean, regular, day-to-day stuff, like, say, cooking or whiskey or gardening or whatever...and that was cool.

Now, among my yuppie-ish (if we still have yuppies...) friends, everybody's a damned hyper-expert on whatever they like. It's not good enough to just, say, like beer and be able to chat a little about it... They all have to know *every freaking thing* there is to know about *every freaking brand*... Jeez, it just gets so bloody *tedious*...

Anyway.

Thanks much for this, A.

I will not hoard.

4:27 PM  
Anonymous Anonymous said...

Sorry, "RI" is because I got tired of typing "rich idiot". The pep talk above notwithstanding, I default to bitterness with the people out there buying Van Winkle at $450 a pop. I have to remind myself not to get huffy over "excess" demand from people who should know better, but with the suppliers who have limited the amount of quality whiskey out there. I've always thought that landlords must have quite a chuckle when they see advocates for the urban poor targeting "gentryfiers" rather than them, and this seems no different. It's pretty telling that the panic is coming from the distillers and publications (like Esquire) dependent on their advertising, rather than from consumers, hence the focus above on how the situation could help us overall.

And yeah, the expertise thing is pretty annoying. My suspicion is that this is the ol' protestant work ethic sneaking in, justifying enjoying something (booze!) only if that enjoyment can be demonstrably the result of hard, hard work. Not an original observation, I know... It's a shame, since talking to someone whose delight in something like cooking is genuine is always delightful itself, but they get crowded out.

5:04 PM  
Blogger Winston Smith said...

Ah, got it.

And as for the last paragraph: agreed

5:31 PM  

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