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« A Skeptic's Interview | Main | Karuizawa Labels Approved - Presales Imminent »
Thursday
Mar142013

Pre-Hype: What the F is Karuizawa?

Do you remember where you were when you first heard about Pappy Van Winkle Bourbon? I do. It was at K&L in 2007 while wandering through the store after we had closed. I wasn't too big into whiskey at that point in time, having applied to work at the store due to my interest in wine. The spirits shelf always intrigued me, however, simply because K&L had all of these bottles I had never even heard of, let alone seen. I remember looking at the bottle of Pappy Van Winkle 20 year (at that time right on the shelf for anyone to purchase) and thinking, "What makes this bottle so much more expensive than the others?" Something about the label intrigued me - the romantic image of a Southern gentleman lighting his cigar. It was all so new, so exciting, but I really knew nothing about it. Only a few years later the whiskey would become a cultural phenomenon due to a completely grassroots, word-of-mouth following. This is pretty much what has happened with Karuizawa single malt from Japan: currently the hottest product on the global whisky market (from what I hear from foreign retailers).

I had never heard the name Karuizawa until 2010 when David OG and I began discussing possible ventures in Japan. Neyah White, now the brand ambassador for Suntory in the U.S., had also mentioned the distillery in our conversations. It appeared that an international beverage company called Number One Drinks was attempting to purchase the remaining stocks of the distillery, which could mean good news for us in our quest to purchase a few barrels. Discussions with Kirin had gone absolutely nowhere and other attempts to reach out to Japan were met with silence. We were watching the news, crossing our fingers that the deal would happen so that we could possibly negotiate with the new ownership. It was at that time that I began doing a bit more research into the whiskey. While the American market was only beginning to pick up on the Yamazaki expressions, there seemed to be a passionate following for Japanese whiskey around the globe. Karuizawa and Hanyu were two of the most coveted. It was the same type of hysteria we were experiencing for the Pappy products, it just wasn't happening domestically.

By the end of 2012, Japanese whiskey had hit the mainstream here in the States. The Yamazaki 18 year old was facing shortages, we were constantly running out of the 12 year, and anything rare like the 1984 vintage was getting snapped up faster than you could blink an eye. With the arrival of Nikka and Chichibu on the horizon, the future was looking extremely bright for Japanese single malt in the American market, but the selection would still be limited to younger releases. The Yamazaki 12 year, Hakushu 12 year, Nikka 12 Year, Hibiki 10 year, and Nikka 15 year are the basis of the American selection currently. While all of these whiskies are outstanding in my opinion, there is a huge thirst for the more mature expressions. "Can you order the Hibiki 17?" is still a query that winds up in my inbox on a weekly basis. Customers are ready to swarm on even the once-ubiquitous Yamazaki 18, let alone something unique, rare, collectable, and delicious. What would happen if a retailer ever got a hold of the Karuizawa or Hanyu whiskies? Would the rabid appetite for these single malts translate over to the American market, or would they go largely unnoticed, like Wayne Rooney walking though a shopping mall?

Founded in 1956, the Karuizawa distillery was built on a former vineyard site high in the Japanese Alps, on the slope of Mount Asama - one of Japan's still-active volcanoes. It was one of three distilleries owned by Mercian, who blended the three together to form its different expressions. What made Karuizawa special, however, was the usage of only Golden Promise barley shipped in from Simpsons in the UK. They utilized four stills, bottled with local water from Mount Asama, and matured mostly in sherry butts. While Mercian began producing single malts from their three distilleries in 1987, it would still be a while before Karuizawa's reputation grew into something special. (For more historical info, view Stefan's many posts at Nonjatta - the great website for Japanese whiskey information).

Mercian ceased all production at Karuizawa in 2001 and the distillery was then "mothballed" until further notice. It sat dormant for more than five years until Kirin purchased Mercian at the end of 2006 and a glimmer of hope was sparked that the beer giant might reopen the legendary distillery. It was not to be, however. In 2011, Number One Drinks, a UK-based beverage company that was already involved in many independent bottlings of Karuizawa, made Kirin an offer on the remaining stocks at Karuizawa and took control of the inventory. It was clear that Kirin had no interest in reopening the distillery and the final curtain came down on one of Japan's most revered single malt institutions.

Meanwhile, the single malt market for "lost" distilleries like Port Ellen, Brora, and Rosebank was hotter than ever. Whisky fans were more educated than ever. They were doing their homework. They were collecting bottles like wine enthusiasts, piecing together collections of everyday drinkers alongside a few serious collectables. Everyone wanted at least a bottle or two of something rare or special - a whisky with a story and a history that stood out from the pack. There was nothing cooler to serious whisky fans than a whisk(e)y that was already extinct. It was like drinking a dinosaur. "You mean to tell me they'll never make this whisky again?" It was infectious. Prices shot up as a result.

Which brings us to 2013. Japanese whiskey couldn't be hotter. Closed distilleries couldn't be more collectable. A combination of both would be enough to explode the heads of most whisky geeks. David OG had the foresight to go after Number One Drinks back in 2011 when the deal with Kirin first went down and attempt to get in early. It turned out to be one of the best moves ever. Number One Drinks was extremely personable and sent out cask samples immediately. We tasted through barrel selections nearly two years ago and made our choices at that time - we were only allowed to pick two. As long as we could get an importer, they were willing to do business (today I'm not sure about further availability, but I don't think they're currently offering any other American retailer access). After the earthquake rocked Japan later that year, however, the U.S. government became super paranoid about forthcoming imports and our attempts to get label approval were subjected to all kinds of scrutiny. It's been nearly two years since we first agreed to terms for two barrels of Karuizawa single malt whisky - one sherry butt from 1999 and another from 1981. We still don't have an ETA for arrival, but we've finally been cleared for label approval. That means we can start the process as of right now.

Pricing for the Karuizawa is almost locked down and, luckily for us (and you!), it's based on the original deal from 2011. You can bet your bottom dollar that Karuizawa whiskey is worth a lot more today than it was back then. We'll be working off of the original quotes so the retail prices will actually be much lower than I have been telling most customers they would be. If everything holds as is, we should be ready to start preorders at around $140 for the 1999 and around $380 for the 1981. I had feared much worse only a few months back (thinking it would be more like $200 and $500 respectively). We're almost ready to release these to the public. David and I are hoping to get everything wrapped up today and put these into the system tomorrow (Friday).

So there you go. If you were wondering what the fuss was all about, this is as best as I can explain it.

-David Driscoll