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There Is No Whiskey Shortage

February 20th, 2015

Is there a shortage of bourbon? Will there be one soon, as booming demand dumbs down age statements and kills off favorite brands? Or is there plenty of good bourbon, with just a few hyped bottles in short supply as the collectors scurry to fill their shelves? We knew two writers with very different opinions, so we invited them to have it out. This Friday, in the Plenty O’ Bourbon corner, Colonel Charles K. Cowdery. Next week it’s Fred Minnick’s turn to argue the gloom and doom side of the issue. Feel free to leave your own opinions in the meantime!

 

Author - Chuck Cowdery“Is there a whiskey shortage looming?” The Tennessean asked last summer. Yes, they answered. Then came ten paragraphs about how bourbon is booming, but nothing about a shortage until this: “To underscore the possibility of a shortage, gains in whiskey sales are outpacing production increases by at least 2-to-1, industry experts say.” Said experts remained unidentified and the vague statistic remained unexamined as we learned about a fledgling Tennessee micro with all of 200 barrels in storage.

It’s not just The Tennessean. That’s the overall state of whiskey shortage journalism today. Why? Because editors love the idea of a whiskey shortage. They want the words “whiskey shortage” in the headline, even if the story won’t support it.

It’s called ‘clickbait.’

In December, the Wall Street Journal got the words “Bourbon Shortage” into a headline by reporting about how bourbon enthusiast fears of a shortage are provoking panic buying. “Fear is a motivating factor,” said Edward Johnson of Simpsonville, South Carolina, as he picked up a Blanton’s and a Henry McKenna at Harvard’s Liquor & Wine.

We have a name for that in bourbon country: Whiskirexia nervosa. It is characterized by a distorted whiskey inventory image and an obsessive fear of running out of whiskey. Individuals with whiskirexia nervosa tend to already own more whiskey than they can ever drink, even as they continue to buy more.

Whiskirexia nervosa, though it may be a facetious name, exists. It may even be on the rise, but it is not evidence of a looming whiskey shortage.

Yes, bourbon is booming. According to a recent report by Vinexpo and the IWSR, sales of bourbon are expected to soar by almost 20 percent, to 45 million cases, by 2018. Bourbon is the fastest growing category in the distilled spirits industry.

Beam Rack House

That sure is one hell of a lot of bourbon, folks.

But that doesn’t mean there is a shortage now, or that there will be one in the foreseeable future.

It is impossible to prove a negative, but consider this. New bourbons are appearing on the market every day, sold by people who didn’t make them. If you owned bourbon, and knew there was a shortage coming, would you sell it to someone else so they could sell it to the public? Of course not.

It’s true that because of the aging cycle you can’t ramp up the production of whiskey like you can, say, Skittles. This has always been the case. Several times a year, producers update their sales projections, compare them to their inventories, and adjust production accordingly.

Some writers have cited as evidence the fact that products are being discontinued, prices are going up, and age statements are going away. Some of that is just normal course of business while some of it does, indeed, represent steps producers are taking to adjust inventories and production so no shortage occurs.

It is also in the nature of whiskey that even as supply tightens, oversupply is always a risk. A lot of whiskey will mature in the next few years whether there is a market for it or not and if it doesn’t all sell, the pipeline will clog up fast. In the robust market we have now, a little price cutting should quickly unplug it, but that’s a long way from a shortage.

What does a shortage look like? We nearly had one 30 years ago. American whiskey was dying. Companies were merging, brands were disappearing, and American whiskey sections were shrinking in liquor stores. In bars, it was just Jim and Jack and maybe Maker’s or Wild Turkey if you got lucky. More than once I was forced to drink Jameson.

What bourbon drinkers can expect for the next several years is the occasional disappointment, when the desire for a certain brand or expression will be temporarily frustrated. The solution? Buy something else. You’ll have plenty of choices.

23 Responses to “There Is No Whiskey Shortage”

  1. Whiskylassie says:

    When I read the headlines last year, I shook my head… Then a short while later the “bible” proclaimed bourbon was king…

    I don’t think it’s a coincidence that this sort of information propagates fear and uneducated purchases by certain people.

    I… Am not one of those people. If some of the bourbons I enjoy become unreachable or disappears due to people hoarding, there is plenty of great whiskies from all over the world for me to buy.

    Lassie

  2. John Lamond says:

    Yes, we have heard this on our side of the pond as well. The No Age Statement Scotch Whiskies are there a) in anticipation of a shortage and b) to see what the distillers can get away with on pricing. There has been a GREAT deal of mumbling amongst the cognoscenti out there about NAS and there are a few that are disappointing (to say the least), but there are also some NAS whiskies which really deliver on flavour and value.
    Some of the markets being touted as huge growth potential areas 7 years ago have faltered and are not delivering the expected growth. This has resulted, in the short term, in a little element of higher stocks at some distilleries than was anticipated.
    It will be another couple of years before we find out whether this falter is going to be of a longer term. Both Diageo and Pernod Ricard have reported soft sales and a downturn in liquid exports, but the industry has always been subject to boom and bust. It has survived all of these over the centuries and come out stronger.
    The question is whether or not it has learned from the experience as the boom/bust seems to continue.

  3. Mark says:

    @John Lomond:

    When you stated “The No Age Statement Scotch Whiskies are there a) in anticipation of a shortage and b) to see what the distillers can get away with on pricing” – my feeling is that it’s much more of point b). With volume dropping, and the big companies expected to deliver profit growth year-over-year, they have one option: cut costs. As NAS is less expensive to produce as the angel’s share is less and they don’t have to hold stock as long, that’s what we get left with. When you slap on a Gaelic name and at a minimum hold the price the same (if not increase it 40%) you end up with what most of the big players in Scotch are currently doing.

    With the volume of Scotch being sold dropping slightly over the last couple years I don’t believe for a second that a perceived shortage is part of the NAS trend.

  4. Jack says:

    There’s a lot of whiskey out there.

    Just not a lot of GOOD whiskey.

    *mic drop*

  5. Josh Feldman says:

    They might be a ton of “Bourbon” as legally defined (i.e. the right corny mash bill, distilled the correct proof, and aged for some period in a new charred oak container) – but that’s a low bar indeed. The kind of Bourbon that excites enthusiasts is, indeed, disappearing. Part of this is the legacy of the extended global whisky glut – where long aged stocks were plentiful and cheap and now are rare and expensive as the ranks of enthusiasts grow and the old stocks have been sucked out and drunk down. The Bourbon boom seems insatiable. First Pappy mania made all the Pappy expressions become rare, and then utterly unobtainable. Then the mania spread to other premium expressions: first the Buffalo Trace Antique Collection, then the Parker Heritage Collection, then Old Forester Birthday editions and the Four Roses Limited Editions (both Single Barrels – recently announced discontinued – and the Small Batch). Each of these has become an event to ever find on a store shelf – even in the limited season. Trickle down has affected similar expressions. Weller 12, once a reliable budget wheater is now famous as “the poor man’s Pappy” and is on allocation. I seldom see it on shelves. As you allude in your piece, Chuck, many expressions that used to have age statements are becoming NAS, from Old Barton to Old Charter to Basil Hayden to Jim Beam Black. You can say it doesn’t matter to flavor, but history says otherwise. Wild Turkey 101 was an epicurean delight when it sported the 8 year age statement in the 90s and is hotter, thinner, and more bitter in the current NAS incarnation. Even deliciious premium offerings, such as Four Roses’ Limited Edition Small Batch is on a course where the components of the vatting are younger and younger each year. Taken as a whole, a rich selection of mature beautiful Bourbons is rapidly disappearing, replaced by no-name Potemkin distillery offerings (thanks for the term, Chuck) and younger less delicious versions of known brands, now NAS. Bourbon as a whole might not be becoming rare – but really excellent excitingly high quality Bourbon certainly is.

  6. Edwin Vargas says:

    I believe that Chuck is right in that there is plenty of Bourbon in the rickhouses and on the shelves. Where people see a “shortage” is in the premium bottles and the limited addition bottles. However, if you look historically at the number of bottles released in those lines the numbers are trending up. Its not that there is less of these premium whiskies but more people seeking them out. Secondary to the issue of greater interest in premium bottles are people who have ready access to those offerings and are hoarding them. If you have the money and know how to access the “Secondary Market” you can buy all the Pappy you want………………………….for a price.

  7. Danny Maguire says:

    There is unlikely to be a whisk(e)y shortage. As has already been said the big two have already started seeing sales soften while they are increasing production in anticipation of a boom. My view is that the boom will be in about 10 years time and it will be independent bottlers. Now is the time to invest in a distillery, if you’vegot the money to finance the next 10 years of no income because by the time the bust ends you will have mature stock to sell.
    B

    • Danny Maguire says:

      Don’t know what happened there, what I was going to finish with was to say, bit of a ramble but if anyone wants to contact me directly I’ll explain what I mean.

  8. Steffen says:

    I agree with Josh Feldman

    It’s not hard to find bourbon, but finding interesting bottles is quite hard. I host bourbon tastings in Denmark, and I struggle to present a decent new 8 bottle line up once a year. This is might not be due to a bourbon shortage, but definetily a shortage of interesting bottles.

    Steffen

  9. Mike says:

    I think the issue is mostly about finding the whiskey you want at a price you like. Long-time shelf staples are seeing periods of empty slots and prices, both wholesale and retail markup, are seemingly inching up faster.

    So, if you want to drink something specific, there’s probably cause for concern. If don’t mind buying and trying different, but still perfectly good quality bottles, then there is no problem.

  10. Richard Turner says:

    Chuck is right, as far as he goes…. But, Josh is also correct in pointing out the extreme difficulty in finding what was once relatively common; Very Good Bourbon at reasonable prices. In fact Very Good Bourbon at even ridiculous prices has become very difficult to obtain. This may be due to a ‘shortage’; but is much more likely due to an exponential increase in demand for those Very Good Bourbons. Sad to say; we may be our own worst enemy in this. To some real extent, we foster by our own promotion the popularity of the drams we favor.

    • Josh Feldman says:

      Indeed, Bourbon is a victim of its own success as large numbers of new enthusiasts create a vibrant market at the high end. The fear is that the new regime of plentiful younger, less amazing, Bourbon may erode the Bourbon boom and stall its growth as new people taste this lesser stuff and wonder “what is all the fuss about?”

  11. Gary says:

    I think Chuck makes some good points, but I’m not convinced that there isn’t a very real possibility of a shortage coming. The speed at which demand has increased far outpace the speed at which production could be increased. Will that demand continue to increase? Or level off? Or fall off as some sheeple move to something new? If it continues to increase – I think we’ve got a problem.

    I also agree with several other responders above on the point of clarification between “bourbon” and “GOOD bourbon”. Although that Richard Turner guy saying we’re our own worst enemy . . . hey, I resemble that remark!

    • Danny Maguire says:

      I like the sheeple bit, and that is just what it is, people who don’t really know what they’re doing following the heard, or should it be flock? When they’ve moved on to the next thing there’ll be plenty for those of us who actually like the stuff. Sould we start the trend for the next big drink?

  12. Ralph Reissman says:

    Anecdotal evidence confirming comments that very good Bourbon is being priced out: In West Hempstead, Long Island, a suburb east of New York City, my local retail store just received about 8 bottles of the Pappy line, ranging in age from 10-20 years old, and ranging in price from
    $300.00 to $800.00. Also heard that in another suburb, Pappy’s 23 year old is selling for $1,300.00. Out of my range for sure.

  13. I’ve been telling people that Whiskeygeddon is exaggerated and yellow journalism for, oh, the last three years. There are certainly hard and solid cases, but these are specific and not general.

  14. The Don says:

    Shortage or no shortage, it all just better be smooooth!

  15. Evan says:

    You guys are funny talking about a lack of “good” bourbon. Damn near all bourbon is at least “good”.

  16. Ken says:

    Ok Chuck, I just got back from my Total Beverage outlet here in Maryland. Weller Antique 107? Gone, deleted from inventory, never again. Weller Reserve? Gone, deleted from inventory, never again. Weller 12? Never in inventory in the first place. Elmer T. Lee? Gone, deleted from inventory, never again. Ancient Ancient Age Ten Star? Gone, deleted from inventory, never again. Ancient Ancient Age Ten Year? Never in inventory in the first place. Very Special Old Barton (aka 1792)? Up 25%. Evan Williams Single Barrel? Up 25%. Is there a “Bourbon shortage”? Idunno. Is there a shortage of Bourbons that are BOTH excellent AND affordable? Absofrickinlutely.

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