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Wednesday
Dec062017

Financial Gains

I wouldn't say I get tons of emails from customers asking me about the collectability of our private casks and bespoke projects, but it's a topic that's come up quite a bit lately in my correspondance. Generally, I don't tackle that subject because I don't think about whisky as an investment first and foremost (it's only come up lately because of all the interest in Ardnahoe's private consumer barrel program). When I pick out a barrel from a warehouse or put together an exclusive deal with a company, my number one focus is value—pure and simple. That value is always immediate, mind you. Rarely do I tell customers: "If you buy this bottle now you can resell it down the line for twice as much." Investment opportunities as they pertain to bottles have never been my speciality, but more than a few people sent me this link yesterday, including John Glaser himself who was downright floored. It's an auction site in the UK that just sold a bottle of our limited edition Compass Box "5th and Harrison" blend for £1450, or roughly $2000. If you'll remember, we sold those bottles for about $170 back in the day, so that's a pretty staggering return on your investment if you're a K&L customer. 

Looking at that auction made me smile, not because I inherently like seeing whisky sell for those prices, but because it only legitimizes the value of the work we're doing here. I had a number of conversations with suppliers yesterday about the growing presence of bait and switch booze operations in California today—the retail stores that show you a really great price online, but when you actually drive over to the store itself they conveniently "just ran out." That's usually when a sales person appears out of thin air and says, "We don't have what you're looking for exactly, but I think you'll enjoy this bottle instead." It's called a bait and switch because they can't make any money selling you the brand name at that price. What they need to do is get you into the store, then switch you over to the house brand. That's how they make their money. A buddy of mine in the industry drove down to one such operation yesterday just to test drive that experience and it went down pretty much exactly as I just described. I bring that up only because at K&L we have the opposite mindset: our bait has become the house brand, not the other way around! Most people today come to K&L for the exclusives and the great pricing is just an added bonus. We don't need to convince anyone to buy what we're selling because, as you can see from the above auction, the value proposition of what we're selling speaks for itself.

However, just because we don't have to compete on price doesn't mean that we won't, or that I'm going to let some shady national operation move into our backyard and make customers think we've been gouging them for years. That's the frustrating part about the bait and switch: it's a strategy that attempts to sow distrust between consumers and their local retailer, but really offers nothing of value as an alternative. It's a chicken shit way of operating. The silver lining here, however, is that a rival always forces you to be more creative and on top of your game. I have to admit: my senses are heightened in these situations and I've got a current running through my spine at the moment that electrifies my soul with each scorching deal I put together. As much as it angers me at times to see such a sloppy attempt to sabotage our local market, it makes me a much better buyer and it brings out the best in our partners who have no stomach for it either.

I think you'll see some hot pricing on the website today as a result of me channeling that vindictive energy into my work. I can't promise you a 1000% return on your investment like with the 5th and Harrison, but I can guarantee you one thing: we actually have the bottles.

-David Driscoll