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Tuesday
May242016

The French Future

For those of you who appreciate quality and value over pop culture trends and current fashion, I have a feeling we're going to convert you over to French spirits before too long. It's pretty crazy that I can buy a product that's more expensive to produce than Bourbon, ship it all the way through the Panama Canal into Oakland, and get it onto the shelf at K&L for the same price or less than a standard NDP American whiskey these days that's made in country. But that's where the market's at! In the meantime, we're getting better prices than ever on incredible Armagnacs, Cognacs, and Calvados apple brandies, testing the loyalties of even the most die-hard whiskey fans. I had a customer tell me this past Saturday that he tried a bottle of the 2001 Grangerie and thought it was better than any current Bourbon on the available market, especially for the price. I couldn't argue with him.

Stay tuned for what should be a pretty happening pre-Memorial Day blitz. We've got our first shipment of Pacory pear Calvados coming later this week, a new producer that we discovered this past December when Charles Neal and I were in France. He's got a nice little five year old pear-distilled beauty that I had bottled at 55% cask strength. We've also got a new delivery of Bouju Cognac, one of our additive-free brandies that showcases the purity and delicacy of unadulterated Cognac. Both will be on the shelf at $39.99—a price you can feel good about when you blow through half the bottle within the first two hours at your family BBQ this weekend.

-David Driscoll

Friday
May202016

Friday Fun Day

I thought I'd take a little walk around the store this morning to show you all some new things that have just arrived. Exciting new things, I should say. Let's start with this: the Nikka Coffey MALT Whiskey. It's finally here! This is the only bottle I purchased when I visited the distillery back in the Fall of 2014. Now I can get one whenever I need it, thank God. You've probably tasted the amazing Nikka Coffey GRAIN whisky, now see what happens when you run malted barley through a Coffey column still. The result is ethereal. It's like a butter biscuit in a glass with soft vanilla and cookie flavors.

Nikka Coffey Still Japanese Malt Whisky $74.99

Gran Dovejo remains one of the best kept secrets at K&L. Distributed by the Mendez family out of the Central Valley, this isn't a big time operation with much reach. It's very much a niche item and we're happy to be the first retailer to work directly with GD on an exclusive expression. They contract with the Vivanco family in Arandas at NOM 1414 (where ArteNOM and Siembra Azul also contract some of their aged expressions), which to me is the best and most consistent distillery in all of Mexico (just my personal opinion). This tequila is like liquid velvet. It's like someone is pulling silk over your tongue, but it's not sweet or full of glycerol either. It's relatively dry, savory, and somewhat earthy, but with a lovely richness to balance out that umami. If like Scotch or Bourbon, but think you don't like tequila, you owe it to yourself to try this.

Gran Dovejo "K&L Exclusive" Single Barrel Añejo Tequila $59.99

Then there's this little guy. Most people around here know David Stirk from his Exclusive Malt single barrel Scotch whisky selections, rather than from seeing his name plastered across the front of a gin label. We've been working directly with David for years, visiting his Glasgow warehouse annually in search of new whisky selections. But David came up with a clever idea recently. Since he was in the business of emptying Scotch barrels, he might as well be in the business of filling them as well. And fill those barrels, he did; but not with Scotch. He filled them with UK-distilled dry gin and allowed the clean, herbaceous spirit to rest inside those casks for some time. The result is half Scotch, half gin, and 100% unique. While there have been barrel-aged gins before, NONE have had the same level of richness. There is a true vanilla and caramel note on the finish as well as the texture and mouthfeel of a Scotch whisky. Simultaneously, though, there is the snappy, fresh flavor of juniper and savory herbs. It's wild stuff and it's the perfect crossover spirit if you're a fan of Scotch looking to branch out into gin. Try it in a Negroni for extra decadence.

Stirk's Gin $39.99

And if you're looking to make a Negroni, maybe you should grab a bottle of this:

St. George Bruto Americano Aperitivo $27.99 - My man Dave Smith has released his alternative to Campari. I accidentally spilt some on my hand while opening the bottle, so for the moment I've only tasted the Bruto Americo in conjunction with human flesh. But I will be adding club soda and ice in the near future!

-David Driscoll

Thursday
May192016

Saturation – Part II

I had an inspiring phone conversation with the head of a major distillery yesterday afternoon. He called me and said, "David, we have a problem. Sales are down and—tell me if you agree with this—we think it's because the market is too saturated and no one is buying the same bottle twice."

AHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHH!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

Then I started jumping up and down while I talked to him. Then he started laughing. Then we discussed.

Let me take you back to something I wrote in 2011 called "The Death of Brand Loyalty." What was true five years ago is now starting to have a serious effect on some of the more established names in the spirits industry. While I saw the phenomenon coming early I'm definitely not the only person who knows what's happening. Why do you think almost every major single malt distillery does an annual limited edition at this point? Why do you think duty free has now become "travel retail," with 27 different Johnnie Walkers, 19 different Macallans, and 154 different Glenlivets? Because boutique, high-end spirits are like fashion at this point and just like few consumers buy the same watch, bracelet, dress, or pair of shoes more than once, fewer and fewer folks are making repeat spirit purchases. Whisky is not wine. It can last months or even years in the bottle once it's opened. Once it's finally gone most drinkers are ready for something new. There's a whole new world of booze out there and most people (myself included) want to experience as much of it as possible while they're able.

Don't think this adventurous mindset is limited to spirits though. If you look closely at various markets you'll see a small crack that's starting to form in the façade of pop culture capitalism. Just like once-prominent booze brands and beer giants are now getting creamed by the multi-headed hydra that is the guerilla craft movement, you're starting to see fragmentation and fracturing in retail as a whole. Nordstrom? Huge losses so far this year. Macy's? Oh man..... Even a few major wine and spirits retailers around the Bay Area have recently departed. What are these stalwarts of retail being replaced by? Pop-up shops. Online retail. Anything that doesn't have to dump a lot of cash into real inventory and infrastructure. If you can either create something or gather products with minimal investment, you can come to market and disrupt major commerce in a major way. Well, maybe not you specifically, but definitely you and thousands of other people just like you. Harness that market like iTunes and you can make billions. Continue down the now-prehistoric path of standard brick and mortar retail and risk total annihilation.

Speaking of iTunes let's talk about music. Let's talk about what happens when an industry that was once controlled by record labels and major media outlets like MTV, Rolling Stone, and commercial radio becomes split into millions and millions of easily-downloaded pieces. Who are the rock stars today? Who are the biggest bands, the biggest stars, and the most famous players in the current rock and roll era? I know how to find out! I'll see who's been headlining Coachella lately, the biggest music festival in the world right now. Let's see....this year it was Guns N Roses. They're a hot new band. Last year it was AC/DC and Jack White, two up and coming acts. Before that it was Outkast and the Arcade Fire. Before that Blur, the Stone Roses, and the Red Hot Chili Peppers. Why do you think the biggest names in rock music are all from a time before music became digital, downloadable, and utterly-congested? I'll give you my opinion: it's because unless you're a teen idol like Justin Bieber or Taylor Swift, the music scene has become so splintered and saturated that it's almost impossible to gain a foothold. If you weren't established before the record industry fell into complete disarray, then you're fighting an extremely steep uphill battle.

Nostalgia is a powerful motivator when it comes to ticket sales and it's hard to be nostalgic about a band you're only going to listen to for a week before downloading something new. But what if you're the next new craft distillery looking to ultimately become the next big brand? Like I said to a friend of mine recently who works for a major company, "If you're not already established as a major global player, you're pretty much fucked." There are so many new spirits on the market that customers are already feeling overwhelmed. Getting just a small piece of their collective attention is almost impossible at this point. You'd have to spend millions just on advertising and have something pretty special to sell, but of course that's if you want to become the next big thing. Many new microdistilleries are happy to simply supply a local demand. They create a buzz in the community and then rely on local tourism and relationships to help them sell small quantities to nearby bars, restaurants, and retailers. The problem now is that even the local playing field is getting quite crowded. But that's not even the biggest problem. The real issue is this: NO ONE IS GOING TO BUY A BOTTLE OF YOUR BOOZE MORE THAN ONCE. Starting a distillery is a risky venture. Starting a brand, however, is almost foolish at this point.

Let me tell you a funny story now. A friend of mine was visiting a incredibly crowded night club in LA recently. Being a businessman himself, he began chatting up one of the bartenders about the apparent success of the place. "You guys are killing it!" he said to the man. "There's a line wrapping around the corner at this point." The bartender smiled and nodded. "How long have you guys been open?" my friend asked.

"Two weeks. But this is our last night. After this we're closing," the bartender answered.

My friend was puzzled. The place was absolutely packed, people were having a great time, and the demand seemed to be off the charts. "Why are you closing?" my friend asked in complete shock.

"Because we can only keep this up for about three weeks," the bartender responded. "After that people find the next hot spot and move there. This is just a pop-up."

You've most likely heard of pop-up capitalism. Pop-up shops. Pop-up taco trucks. Pop-up anything. It's a form of business that allows one to take advantage of a quick and likely waning interest without any of the risks of long term investment. In a sense, that's where everything is heading because right now consumers are looking for as many new experiences as possible. What do you think single barrel whiskies are? Pop-up Bourbon. What do you think batch numbers on Laphroaig cask strength bottles or Aberlour A'Bunadh labels represent? Pop-up Scotch. To be successful, you have to turn your inventory quickly, then create a new experience as quickly as possible in order to recapture the same audience once again. It's crazy! It's also extremely difficult, hence my summation from the last post: WORK. You have to take a whiskey that would normally be made in 100,000 case quantities and instead make ten different 10,000 case whiskies, or 100 different 1,000 case whiskies and differentiate them somehow in order to make the same amount of profit you made doing one simple batch.

But while pop-up capitalism might simply be a reaction to the limited attention and interest of the modern consumer (as well as a smart use of e-commerce) what are the long term consequences? Maybe I should put it this way: what happens when modern business philosophy revolves around capturing your money as quickly as possible with a product that's specifically-designed to be limited? As long as the quality is there and the intentions are pure, I think it can be rather exciting in limited doses. But I'm worried about what happens when people are no longer able to invest in quality and pop-up capitalism becomes the norm. Would you rather date a different person every two weeks for the rest of your life, or invest your time into building a special and lasting relationship? Would you rather discover a new band every two weeks, or would you rather watch a few great bands develop and improve year after year? Would you like twenty new restaurants in your downtown area each month, or five really good places that you can depend on when you need them? More importantly, would you rather do business with someone who has invested their heart and soul into building something great? Or would you rather buy your booze from someone who says, "Hey man, I'm just trying to build this thing up quickly so I can dump it off to a major brand for twenty million?"

I have to think microdistillation to many is the new start-up and that's part of the reason we're currently saturated in mediocre new spirits. The cost of starting a distillery is lower than it's ever been and getting to market has never been easier. The result? There's more good booze available now than there's ever been, but there are fewer great products. Transcendent spirits are even rarer. But if a quick-to-market, knee-jerk, exploitative, repackaged whisky costs fifty dollars, where does that leave long-standing brands who have invested in quality and can show a rich history of tradition? There's a reason why Yamazaki 18 costs what it does now, just like there's a reason it now costs $500 to go see the Rolling Stones. People are still willing to pay for quality. But is there anyone out there willing to invest in it?

-David Driscoll

Tuesday
May172016

Saturation 

We're witnessing a very unique moment in the spirits business; at least here in the boutique, niche section of that industry. Someone told me today that roughly 5,000 new microdistilleries were expected to come to market in 2016 according to a study they had read. I believe it. Over the past three months I've received multiple emails, daily, requesting an appointment to taste me on a new gin, vodka, local whisky, or distilled spirit of some sort. It's at the point where I don't even know what to do. As a retailer you can't buy everything you like, or even love. There's a point where the market reaches saturation and too much is too much. Let's put it this way, I've been given thirty new gins to taste over the past month. THIRTY! Even if I liked five of them who has room in their bar for five new gins, let alone thirty? I don't. I still want to play around with the five new gins I brought in last month. The scary thing is: there might be another thirty waiting for me in June. Who—and I mean this literally not rhetorically—is going to buy all this booze? 

Now table this thought for a second. Let me share with you the other side of this equation. The only email requests that outnumbered the appointment queries have been from customers looking for bottles we don't have. And I don't just mean some random liqueur from Northern Italy that they had on vacation last summer or a flavored vodka that they tasted at a friend's house. I mean incredibly rare and allocated things like Eagle Rare 17, Yamazaki 18, and forthcoming American whiskies that I will likely receive less than a case of in total. Even fairly large retailers like K&L receive teeny-tiny portions of these coveted whisky pies. I might get three bottles of Pappy 20 this year. Maybe two bottles of the 23. In non-Pappy terms, however, I might get twelve bottles of the upcoming Booker's rye whiskey; maybe a few more than that, but not much. What should I then do about the 900+ emails in my inbox asking me about if and when we might receive the Booker's rye? Whether it's the right move or not, I can tell you what I'm going to do. I'm going to write an apologetic response, explain the current state of the market, tell them there's nothing I can do to help them, and then rubber stamp that thing as many times as necessary until every email has been answered.

So, like I said, we're witnessing an interesting moment in the spirits industry. The boutique production is expanding like crazy because demand is supposedly up. Booze is hot!! Everyone's talking about it! Except that no one wants anything that they can get. If it's on the shelf and available 365 days a year, then it's not desirable. Spirits at this point have become fashion. They are identical in the metropolitan sections of this country. People want to stand out, be different, make a splash, and have something unique. I talked to a female friend the other day about her jewelry, having admired her necklace. "I love wearing this necklace because I always get so many compliments," she told me over a drink. That sounds like today's whiskey consumer. "I like drinking this whiskey because when I bring it to a party I get so many compliments," I can imagine someone saying. Dusty hunting is like antiquing. Driving from liquor store to liquor store is no different from running between Nordstrom and Bloomingdale's. What does this whiskey say about you? That you're an individual? Someone with taste? I'd say it definitely compliments your eyes and brings out your cheek bones.

Not that I'm complaining, mind you. I'm just observing. I think it's hilarious that I receive hundreds of emails each month from producers to taste spirits the public doesn't seem to want. Yet simultaneously I'm answering nonstop emails from excited potential booze consumers about spirits that we don't have. Does that not seem funny to you? I've got a huge store full of great booze and the only thing people want to talk to me about is what I DON'T have. HA!!!!!! HAHAHAHAHAH!!!!! (imagine an insane person laughing hysterically, that's me right now). You need to look at the fine print. Yes, spirits sales are up, but they're not up across the board and the market as I'm experiencing it is definitely not capable of handling an expansion of 5,000 microdistilleries, each of which is offering a vodka, gin, and young craft whiskey. We can barely sell the cream of the crop! It's not like Westland, Cut Spike, and Copper & Kings are flying off the shelves. We're cultivating them. They're coming along. People are slowly being introduced to them and their reputations are spreading. But there isn't room for another 5,000 of them in today's market. There's barely room for three.  

I spoke at corporate leadership events over the past year for LVMH, Pernod-Ricard, Beam-Suntory, and Diageo respectively. Each company team asked me the same question: what's next, David? Is it tequila or mezcal? Maybe it's rum? Or even a vodka resurgence? You know what I told them? Work; that's what's next. Work, work, work, work, work, channelling my inner Rhianna. WORK. That's what's coming. Motherfucking work. Here's an example of what I mean: let's say Beam-Suntory sold 500,000 bottles of Yamazaki 12 last year, but this year they only have 100,000 available. That means they're now going to have to work five times as hard because they're going to have to allocate those bottles fairly and strategically (just like I have to do with my rare whiskey allocations) and yet they're only going to make 20% of what they made previously. Does that make sense? There's less whisky available which actually makes it harder to sell from a producer/retailer perspective, yet you're doing more work for less pay! Hooray!

Here's another example: in 2008, I had Pappy Van Winkle on the shelf all the time. As much of it as I wanted. Just sitting there. Yet now I only get a few bottles a year and I have to put in ten times as much work to fairly sell and allocate a mere fraction of what I used to move. We hold a raffle with our best customers and doing so requires hours and hours of extra work to make exactly the same amount of money we would make if we simply put them on the shelf and let them fly. I don't have to do that, of course. I choose to. I believe in fairness. I don't believe in jacking up our prices or simply selling to the highest bidder. I believe in sorting through emails, answering one's correspondence, explaining how things work and what's happening in the market, and making sure every customer knows we're listening to them even if we can't give them what they want. That takes time and energy, which equate to work. That's what's next, booze industry: more hard work. That's OK though. I'm willing to do the work and, believe me, there's a lot of fucking work ahead. There's a lot of explaining that needs to get done and there's more whiskey than ever that needs to be allocated fairly. 

But I've got plenty of gas in the tank. I live for this shit. I'm actually very excited about this development because while I might not know everything about whiskey or have the world's most cultivated palate, I can outwork anyone. Bring it on, baby.

-David Driscoll

Monday
May162016

Chivas Blended Whisky Seminar - Tues, May 24th

While we continue to search out fantastic new casks of single malt, Bourbon, and other glorious spirits from all over the world to satiate the rabid thirsts of our enthusiastic customers, I'm still interested in learning about the olden days of blended whisky—even if that category does little to excite our current clientele. Chivas Brothers was once one of the most prestigious Scotch whiskies in all the world, yet we haven't sold a bottle of it since God knows when. I'd like to learn a little more about what we're missing and maybe what I've been overlooking since refocusing the section seven years ago, but why do it alone? 

Why keep that privilege to myself? Why be one of 1,542,897 guys around the world who taste spirits, then tell other people about their unique experience online? Here's a photo of what I drank. Here's how it tasted. Here's what I think. Now follow me on social media and help me gain credibility across the web!!

I'd rather invite you to join in on the fun. I know the guys at Pernod-Ricard. I know the guys at Donato in Redwood City. I've rented out the room. I've secured the Chivas expert for the evening. The team is going to bring the Chivas 18 year, the 25 year, the Royal Salute 21 year, and the heralded Royal Salute 38 year. We're going to eat trays full of appetizers and snacks from Donato's kitchen and then we're going to learn about blended whisky and the history of Chivas to understand where the focus is today. I'm pretty excited to taste these. The Chivas 25 year alone is a $300 bottle of whisky. The Royal Salute sells for $700+. 

Wanna understand why? Then come join me. This is literally just the cost of the food and the room. Everything else is purely educational non-profit. How can you beat that? I only have space for twenty-five friends though. That's the only hitch.

Chivas Whisky Tasting @ Donato Enoteca in Redwood City, May 24th, 7 PM – $35

-David Driscoll