Scraping the barrel

14 May, 2015

These figures are provided by the president of Michter’s whiskey, Joseph J Magliocco, who adds: “With a 9.2% share bourbon and Tennessee whiskey seem to have plenty of room to grow in that market. At Michter’s we are optimistic about the future, both at home and abroad.”

So all seems rosy in the American whiskey market then? Well, not entirely.

Possible pitfalls

While the whiskey makers are making more whiskey than they ever have before, demand is still outstripping supply. Significantly. And there are other problems, too. The whiskey boom could hit the wall not because of a cyclical fall off in demand, but because there is a danger that the industry will run out of barrels to mature the whiskey in.

“The barrel issue is in control but is still an issue for the industry in the future,” says Kris Comstock, brand manager for Buffalo Trace. 

“As for allocation, all our whiskeys are allocated. Our ancient and experimental ranges are highly allocated. Very few bottles go to London. We were putting three barrels aside 15 to 20 years ago so there isn’t much of it. We were doing so to satisfy our own curiosity more than anything else, and not all the whiskey is good enough to release, so it is extremely rare.”

Magliocco argues that, despite what some of the craft producers are claiming over accelerated maturation, you just can’t close the time gap.

Given that there is no substitute for time in making good whiskey and given that there has been extremely strong growth in American whiskey that even the extremely optimistic would not have predicted, it is not a surprise that quality American whiskey is allocated pretty much everywhere. 

“We have been allocating Michter’s for years, and our gatekeeper master distiller Willie Pratt has been nicknamed Dr No by our sales staff for his refusal to release Michter’s ryes and bourbons until they are, in his opinion, at peak maturation for their type.”

Lew Bryson, editor of American whiskey magazine Whisky Advocate, says allocation was inevitable. “I’m sure the distillers figure, ‘why ship it when we can sell every drop here?’,” he says. 

“The major problem they’re facing now is balancing sales growth with supply, and supply is behind the curve. It’s catching up quickly, but we have the same enthusiast problem here that Europe does. Whiskey drinkers think every great whiskey should be available to anyone who wants to buy it, at the same price it was 10 years ago, and they should be able to buy it by the case. This ignores the huge growth in the number of people who want to buy these allocated whiskeys. The 1990s are over, and they’re not coming back soon.”

This is a good point. The laws of supply and demand should force the price of American whiskey, as it has done with scotch, to balance out. It hasn’t happened in the States, partly because American whiskey drinkers wouldn’t accept it, and partly because the American industry is intent on staying loyal to its core drinkers. That gives the rest of the world a sizeable problem - many territories are simply not seeing great whiskeys such as Maker’s 46 or George T Stagg.

“You might just find a bottle of George T Stagg on one day in October if you’re lucky,” says Comstock. “But then it’s snapped up and it’s gone.”





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Joe Bates

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