If you believe news stories that have been flying around for the last few months… the world’s in the midst of a whiskey shortage. Especially of very old Scotch.
The thing is, Scotch is aged in barrels, sometimes for over a decade. And back when that stuff was put in the barrels, whisky companies didn’t realize today, there’d be much more demand for this stuff. And they didn’t make enough to accommodate that demand… or at least that’s what some say. Others aren’t so sure.
This week, Rico spoke to Reid Mitenbuler. He wrote the book “Bourbon Empire” about the history of American whiskey. Below he explains why he’s got a contrarian view of the “shortage” and why whiskey demand has skyrocketed over the last few years.
On whiskey becoming popular again
There are a number of, you know, theories floating around. You know, the one I like to say is– you can use the American whiskey market as an example. America was a whiskey-drinking nation. And then, in the ’60s, you saw the market start to crater as Baby Boomers started to affiliate whiskey as kind of an old man’s drink. It was, you know, part of the past. And they turned to lighter drinks like vodka and that kind of thing, and they were rejecting the past. And I think the reason it’s popular today is a reversal of that.
We’re embracing the past. There’s a nostalgic element and also a fashion statement, I think.
On how international demand could quickly spark a shortage
…When I talked to the companies while doing book research, you know, they told me that if demand really booms in places like India and China, it’s going to clear them out.
One of the companies told me if everyone who drinks Scotch — and Scotch dominates international markets — if one person in a bar every night were to switch their order from Scotch to some kind of American whiskey, be it rye or bourbon, it would just clear out all the warehouses in the United States. That’s what they’re worried about is those markets.
On just how crazy price gouging is in the current market
You’re seeing bottles on the U.S. side of the market that, you know, were maybe $50, $60, $70 just a few years ago — you’ll see them in these kind of gray market, black market sites online going for thousands. And sometimes you’ll see the empty bottles going for just a couple hundred. Which, you know, if you’re buying your liquor online from some guy, I’d be a little suspicious.
On why Reid skeptical of the speculative whiskey bubble news
So, there have been a lot of articles and a lot of press recently about, you know, this whiskey shortage, which was a great headline. You know, because they always kind of come with this image that you’ll walk into your liquor store, and it’s going to be this barren wasteland…
But a lot of these brands are actually on allotment. You know, a certain amount is set aside for certain regions, the way liquor is usually distributed, and, you know, before it would run out, say, in three months. Well, now it’s maybe running out in two months. So, there might be a month gap where you’re not going to find it, but if you wait a little bit, you are going to find it.
If you take your gaze, and you move it just a few inches over on the shelf, you’re going to see something else that’s really good, maybe even better, for maybe even a lower price. But people are getting excited, and a lot of people are coming to whiskey new… and I don’t know if those lessons have fully sunk in yet.
I’m friends with a gentleman who owns a few liquor stores here in New York, and I asked him, “What’s the biggest difference between five, six, seven years ago and right now?” And he goes, “Back then, people would come in, and they only would buy a bottle or two, and I’m starting to see a lot more customers wanting cases. As soon as I get my shipment, they vacuum it up.”
So, I have this vision of a lot of whiskey geeks, you know, they’ve got these basements and closets full of whiskey. It’s like a scene from “Indiana Jones” or something. You open it up, and there’s a glow, and they’re huddled with their shotgun. You know, “Get away from my whiskey!”
….And this is something that has always happened to whiskey. Even back in the 1800s, you had these speculative bubbles.
On how brands have fueled the whiskey shortage perception
You’re starting to see in the market now — used to be a lot of companies would just focus on having a few, just a few brands that they really pushed — and you’re seeing a lot more limited releases now, special one-offs. And they’re not necessarily that special, but it creates a sense of exclusivity, a sense of rarity around the brand when they company’s like, “Well, you know what? It’s only going to be available for a few months…”
They’re not necessarily worth it, and some of them can be very good. But, you know, whiskey, inherently, is a very simple product. It’s just some grains. You know, that’s the base, and you just throw it in an old barrel. It’s not that complicated. But, you know, the sweet hustle of the history of this industry is: we’re going to try to take what, in America, was just hillbilly juice, basically, right? And we’re going to try to get people to charge more for it. I mean, it’s a business.
What are some cheap and great tasting whiskey brands?
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