Brown Liquor of the Moment
- Thread starter wader
- Start date
Too funny. Now we can add driving up the price of bourbon to the ills of Social Media...
In June, two men in Virginia were charged with an unusual form of insider trading: selling information about when and where rare bottles of whiskey were going to appear in state-run liquor stores.
To an outsider, their scheme may sound strange. To many bourbon collectors, it is just another cautionary tale from today’s frenetic whiskey market — and one that some probably wish they had thought of first.
According to prosecutors, Edgar Garcia, an employee of Virginia’s alcohol control board, fed the confidential information to Robert Adams, a private collector, who sold the list to scores of people on Facebook for up to $400 each.
Virginia requires that hard liquor be sold at government-owned outlets, where it is priced significantly lower than in most other states. To control the inevitable rush by bourbon lovers to snap up sought-after bottles for less, the state keeps distribution details a secret, announcing the releases at random times via email and on the board’s Facebook page. Fans then stampede to the stores, and every minute counts.
“I was there within 20 minutes,” wrote one buyer on Facebook after a release in November, only to find the shelves already picked over. “At least 10 people in the store when I got there.”
The willingness of Mr. Garcia and Mr. Adams (who both pleaded guilty) to commit a felony just to sell information, and the apparent eagerness of others to buy it, is a measure of how much the decade-long bourbon boom has turned into a mania.
Bourbon and rye, the leading styles of American whiskey, have long been considered workaday drinks, sold at working-class prices. As recently as the early 2010s, it was hard to find a bottle priced above $100, and most sold below $50. Even as the market for six-figure single-malt Scotches boomed, collectors largely shunned American whiskey, aside from a few standouts like Pappy Van Winkle.
That has all changed. At an auction at Sotheby’s last spring, several bottles of Michter’s bourbon sold for more than $20,000 apiece. A new brand, the Macklowe, is selling its American single malt for $1,500. And a bottle of LeNell’s Red Hook Rye, an extremely rare whiskey bottled in the late 2000s by a Brooklyn liquor-store owner, LeNell Camacho Santa Ana, can go for more than $90,000.
The price leap is not just at the luxury level. Everyday bourbons like Buffalo Trace or Eagle Rare, which once sold for about $35, now often go for twice that.
“Today, $75 is the new $35,” said Dixon Dedman, who created Kentucky Owl, one of the first luxury American whiskeys not called Pappy. Mr. Dedman and his partners sold Kentucky Owl to Stolichnaya for an undisclosed sum in 2017, and he just introduced a new brand, 2XO, with a retail price starting at $95.
The craze drives collectors to extreme lengths. Like music fans eager to snag tickets to an upcoming show, some will camp overnight outside liquor stores, hoping to grab a limited release from cult distilleries like Buffalo Trace and Four Roses.
It’s hard to pinpoint when the bourbon boom went into overdrive. The Distilled Spirits Council of the United States, a trade group, says sales of all American whiskeys have grown at a steady pace over the last decade, from 16 million to 30 million nine-liter cases.
For most of that time, the volume of sales was consistent across all price categories, from cheaper to so-called super-premium bottles costing more than $50.
Then, around 2016, sales of super-premium whiskey took off, while those of cheaper whiskey slowed. Over the next five years, sales of so-called value whiskey, priced under $20, rose just 4.2 percent, while sales of super-premium rose more than 129 percent.
Bourbon fans were becoming better educated, and with that education came a willingness to pay more for higher quality and, even more important, exclusivity. In response, distilleries began to offer limited-release bottles with unusual qualities — drawn from a single barrel, for example, or bottled at high proof — which fueled interest.
Supply became an issue as well. Whiskey has to age, so production can’t simply ramp up to meet demand. The amount of whiskey on the shelf today is a function of decisions made five or more years ago.
The pandemic drove demand higher by combining unexpected free time, in the form of quarantines, with unexpected money, from a booming stock market and government stimulus checks.
Social media then amplified the hype. For many, the so-called crotch shot, in which a lucky buyer posts a photo on Instagram of his latest find, ideally taken from the driver’s seat just after leaving a liquor store, has become a status symbol. Depending on the bottle, it can be as potent as a Rolex-clad wrist.
While some people will drink those bottles, others will flip them on the illegal secondary market, often for much more than they paid, or hold onto them as an investment.
“There’s some poor guy out there whose wife has been nagging them about the 120, 200 bottles in the basement,” said Taylor Cope, who edits the website Malt Review. “And he says, ‘No, you don’t understand, I paid X for these and they’re worth 2X or 5X or whatever,’ and maybe for him that’s some weird nest egg or retirement savings.”
For many veteran collectors, the mania has become a turnoff. What was once a geeky niche community has been replaced by an aggressive world of very wealthy collectors and speculators, driving up prices beyond what most people can afford. These longtime collectors even have a special insult for fans of overhyped whiskey — “taters” (which may be short for potato, though no one is quite sure).
“Today it is so competitive, and that’s not what the spirit is all about,” said Mason Walker, a bourbon collector in Scottsdale, Ariz.
Mr. Walker said he was recently approached by a New York auction house interested in selling his collection of almost 1,000 rare bottles. Despite a lucrative offer — he declined to say how much — and against his wife’s better judgment, he decided to keep them, for fear that they would end up in a vault somewhere, never to be opened.
Mr. Walker is not alone in feeling torn by the bourbon craze. Many longtime collectors have grown frustrated, even exhausted. They talk about moving on to something else: Bas Armagnac is frequently mentioned as the next trendy spirit.
“A little bit of the chase is fun,” Mr. Cope said. “The full-time-occupation chase is not that fun. People miss being able to go into a store and discover something new, and so maybe they move on.”
Still, he added, there is also a more positive way to look at the mania.
For too long, whiskey fans grumbled about bourbon being underappreciated, that a typical $35 bottle was just as good as a single-malt Scotch priced twice as high, or more.
And just maybe, Mr. Cope said, what’s happening now is not a bubble in bourbon, but a leveling up in the public’s appreciation for it. True, there’s a lot of frustrating froth — no one wants to see more crotch shots — but behind it may be a justifiable readjustment of bourbon’s public image.
In the early 1980s, Elmer T. Lee, an unassuming Kentuckian who worked as the distillery manager at what is now called Buffalo Trace, told his bosses that American whiskey was every bit as nuanced and elegant as single-malt Scotch, and in the right packaging could be sold at luxury prices. The owners, desperate for money, asked him to prove it.
He responded with Blanton’s, the first single-barrel bourbon. He had a bottle custom-made, complete with a metal-and-cork top, and in 1984 he released it at about $30. For decades, that’s roughly where it sat, creeping up with inflation to about $60 in 2018.
Then, suddenly and for reasons no one can quite explain, Blanton’s went viral. Podcasters talked it up. Instagrammers hyped it. Customers lined up to buy bottles, even after store owners tripled or quadrupled the price. In New York, it often sells for more than $300.
Mr. Lee died in 2013, and so never got to see his bourbon achieve its stratospheric valuation. Would he be proud of its success, or repelled by its luxury status, realizing too late that he had created a monster?
Both answers seem possible — which speaks volumes about the fractious state of American whiskey and its legions of fans.
Where Did All the Bargain Bourbon Go? Blame the Whiskey Mania.
Bourbon and rye used to be workaday drinks, but prices are being driven way up by speculators, a scramble for bragging rights and a large shot of hype.In June, two men in Virginia were charged with an unusual form of insider trading: selling information about when and where rare bottles of whiskey were going to appear in state-run liquor stores.
To an outsider, their scheme may sound strange. To many bourbon collectors, it is just another cautionary tale from today’s frenetic whiskey market — and one that some probably wish they had thought of first.
According to prosecutors, Edgar Garcia, an employee of Virginia’s alcohol control board, fed the confidential information to Robert Adams, a private collector, who sold the list to scores of people on Facebook for up to $400 each.
Virginia requires that hard liquor be sold at government-owned outlets, where it is priced significantly lower than in most other states. To control the inevitable rush by bourbon lovers to snap up sought-after bottles for less, the state keeps distribution details a secret, announcing the releases at random times via email and on the board’s Facebook page. Fans then stampede to the stores, and every minute counts.
“I was there within 20 minutes,” wrote one buyer on Facebook after a release in November, only to find the shelves already picked over. “At least 10 people in the store when I got there.”
The willingness of Mr. Garcia and Mr. Adams (who both pleaded guilty) to commit a felony just to sell information, and the apparent eagerness of others to buy it, is a measure of how much the decade-long bourbon boom has turned into a mania.
Bourbon and rye, the leading styles of American whiskey, have long been considered workaday drinks, sold at working-class prices. As recently as the early 2010s, it was hard to find a bottle priced above $100, and most sold below $50. Even as the market for six-figure single-malt Scotches boomed, collectors largely shunned American whiskey, aside from a few standouts like Pappy Van Winkle.
That has all changed. At an auction at Sotheby’s last spring, several bottles of Michter’s bourbon sold for more than $20,000 apiece. A new brand, the Macklowe, is selling its American single malt for $1,500. And a bottle of LeNell’s Red Hook Rye, an extremely rare whiskey bottled in the late 2000s by a Brooklyn liquor-store owner, LeNell Camacho Santa Ana, can go for more than $90,000.
The price leap is not just at the luxury level. Everyday bourbons like Buffalo Trace or Eagle Rare, which once sold for about $35, now often go for twice that.
“Today, $75 is the new $35,” said Dixon Dedman, who created Kentucky Owl, one of the first luxury American whiskeys not called Pappy. Mr. Dedman and his partners sold Kentucky Owl to Stolichnaya for an undisclosed sum in 2017, and he just introduced a new brand, 2XO, with a retail price starting at $95.
The craze drives collectors to extreme lengths. Like music fans eager to snag tickets to an upcoming show, some will camp overnight outside liquor stores, hoping to grab a limited release from cult distilleries like Buffalo Trace and Four Roses.
It’s hard to pinpoint when the bourbon boom went into overdrive. The Distilled Spirits Council of the United States, a trade group, says sales of all American whiskeys have grown at a steady pace over the last decade, from 16 million to 30 million nine-liter cases.
For most of that time, the volume of sales was consistent across all price categories, from cheaper to so-called super-premium bottles costing more than $50.
Then, around 2016, sales of super-premium whiskey took off, while those of cheaper whiskey slowed. Over the next five years, sales of so-called value whiskey, priced under $20, rose just 4.2 percent, while sales of super-premium rose more than 129 percent.
Bourbon fans were becoming better educated, and with that education came a willingness to pay more for higher quality and, even more important, exclusivity. In response, distilleries began to offer limited-release bottles with unusual qualities — drawn from a single barrel, for example, or bottled at high proof — which fueled interest.
Supply became an issue as well. Whiskey has to age, so production can’t simply ramp up to meet demand. The amount of whiskey on the shelf today is a function of decisions made five or more years ago.
The pandemic drove demand higher by combining unexpected free time, in the form of quarantines, with unexpected money, from a booming stock market and government stimulus checks.
Social media then amplified the hype. For many, the so-called crotch shot, in which a lucky buyer posts a photo on Instagram of his latest find, ideally taken from the driver’s seat just after leaving a liquor store, has become a status symbol. Depending on the bottle, it can be as potent as a Rolex-clad wrist.
While some people will drink those bottles, others will flip them on the illegal secondary market, often for much more than they paid, or hold onto them as an investment.
“There’s some poor guy out there whose wife has been nagging them about the 120, 200 bottles in the basement,” said Taylor Cope, who edits the website Malt Review. “And he says, ‘No, you don’t understand, I paid X for these and they’re worth 2X or 5X or whatever,’ and maybe for him that’s some weird nest egg or retirement savings.”
For many veteran collectors, the mania has become a turnoff. What was once a geeky niche community has been replaced by an aggressive world of very wealthy collectors and speculators, driving up prices beyond what most people can afford. These longtime collectors even have a special insult for fans of overhyped whiskey — “taters” (which may be short for potato, though no one is quite sure).
“Today it is so competitive, and that’s not what the spirit is all about,” said Mason Walker, a bourbon collector in Scottsdale, Ariz.
Mr. Walker said he was recently approached by a New York auction house interested in selling his collection of almost 1,000 rare bottles. Despite a lucrative offer — he declined to say how much — and against his wife’s better judgment, he decided to keep them, for fear that they would end up in a vault somewhere, never to be opened.
Mr. Walker is not alone in feeling torn by the bourbon craze. Many longtime collectors have grown frustrated, even exhausted. They talk about moving on to something else: Bas Armagnac is frequently mentioned as the next trendy spirit.
“A little bit of the chase is fun,” Mr. Cope said. “The full-time-occupation chase is not that fun. People miss being able to go into a store and discover something new, and so maybe they move on.”
Still, he added, there is also a more positive way to look at the mania.
For too long, whiskey fans grumbled about bourbon being underappreciated, that a typical $35 bottle was just as good as a single-malt Scotch priced twice as high, or more.
And just maybe, Mr. Cope said, what’s happening now is not a bubble in bourbon, but a leveling up in the public’s appreciation for it. True, there’s a lot of frustrating froth — no one wants to see more crotch shots — but behind it may be a justifiable readjustment of bourbon’s public image.
In the early 1980s, Elmer T. Lee, an unassuming Kentuckian who worked as the distillery manager at what is now called Buffalo Trace, told his bosses that American whiskey was every bit as nuanced and elegant as single-malt Scotch, and in the right packaging could be sold at luxury prices. The owners, desperate for money, asked him to prove it.
He responded with Blanton’s, the first single-barrel bourbon. He had a bottle custom-made, complete with a metal-and-cork top, and in 1984 he released it at about $30. For decades, that’s roughly where it sat, creeping up with inflation to about $60 in 2018.
Then, suddenly and for reasons no one can quite explain, Blanton’s went viral. Podcasters talked it up. Instagrammers hyped it. Customers lined up to buy bottles, even after store owners tripled or quadrupled the price. In New York, it often sells for more than $300.
Mr. Lee died in 2013, and so never got to see his bourbon achieve its stratospheric valuation. Would he be proud of its success, or repelled by its luxury status, realizing too late that he had created a monster?
Both answers seem possible — which speaks volumes about the fractious state of American whiskey and its legions of fans.
wader
Well-Known Angler
what's the Brand? Can't really see due to the small size of the picture.
Matts
Angler
Fighting 69th Regiment, from Ireland
I knew those couldn't be the real thing....
www.yahoo.com
Mini bottles of Fireball aren't actually whiskey, leading to a lawsuit
People buying small bottles of Fireball at their local convenience store might be surprised to learn that they're not getting the same as the stuff that comes from the liquor store - and that difference is at the center of a lawsuit in which a customer is suing the maker of both beverages...
Snapprhead27
Well-Known Angler
Macallan Lumina... never had this one.
wader
Well-Known Angler
how is it?
Snapprhead27
Well-Known Angler
Good. I like my 12
Snapprhead27
Well-Known Angler
Remy Martin Louis XIII
Tigashrk
Angler
You forgot the three advil.
My Advil chaser is usually a Margarita
Snapprhead27
Well-Known Angler
Picked this up in Vermont at a local place. Finally opened it.
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