It's amazing how many people read this blog considering how haphazardly I write sometimes. But since I have the audience that I do, let me take advantage of it. All you distillers, producers, company owners, importers, distributors, retailers, and general workers in the name of booze, since I know you're all reading this (because you tell me you do): please listen up.
I had lunch with my friend Andrew Morrison today, who owns A.D. Rattray and the upcoming Glasgow Distillery. We had a long talk about the whisky business and the issues we're both facing. It became pretty clear after only a few minutes of catching up that both of us were in the same boat. If you work in the whisky business in just about any capacity you're definitely dealing with your own version of this sticky situation; the issue of how to handle the plethora of new customers and the lack of available supply. Everyone has to figure out how to dole out their allocations of desirable goods in the most effective, fair, and—yes—profitable way possible. Failing to balance these three branches of whiskey government might not instantly slow your rising tide, but it may come back to haunt you (and maybe all of us) if you don't tread lightly.
When you've got a small allocation of a product in high demand, you can obviously charge a little more than you normally would. In certain instances, the extra work required to fairly divvy up the bottles might justify the extra profit because—let's face it—it's a pain in the ass trying to please everyone. We're all feeling the frustration right now. I hate having to allocate twenty bottles of Pappy to ten thousand screaming whiskey fans. Andrew hates having to decide between which markets to send his A.D. Rattray selections to. Ultimately both of us could simply forget all the stress, jack the prices up to the moon, and cater to the highest bidder, but we care too much—both about our customers and the healthy growth of new markets—to simply cash in on this movement and outsource the world's best whiskies to the wealthiest 1%. We know there's always going to be someone out there willing to pay more, but that doesn't mean we need to gut this market for every penny we can. We need to think about developing young, passionate new drinkers. Pricing them out of everything worth a damn would be both short-sighted and foolish.
The prices at K&L, as well as from A.D. Rattray, have risen over the last year, but—as Andrew and I discussed with one another—our margins are exactly the same, if not less in many cases. We're both taking smaller payouts in some instances to lessen the blow that an egregiously high sticker price can have on consumers. By doing so, however, we're experiencing a higher demand for service from an increase of customers looking to purchase from us. With more demand comes more work, and with more work comes the more difficult task of keeping everyone satisfied and their expectations met. Eventually, if you're not given more time and more resources to do twice as much work, you will crack. I look at it this way: I have less than a third of the supply that I once had for the most popular whiskies we sell, yet I now have five times as many customers who want them. I'm trying my best not to raise prices. I'm simply choosing to do the extra work instead. I answer emails while I eat my cereal instead of waiting until I get to the store, and I place orders while I watch baseball at home in the evenings. I'm making the same salary I've always made, yet I'm working twice as much because I don't want to disappoint people.
I get the concept that time is money. I get that the market is hot and ripe for exploitation. And I get that producers are excited about all of the opportunity out there for expansion. I'm not advocating that prices shouldn't be rising, or that profits shouldn't continue to increase. We've all earned it (well, some of us). The clear and present danger this market presents, however, is not the rising costs, but rather the loss of customer service that will eventually occur once companies start taking this type of market activity for granted. I face this demon every single day. "Fuck it! Why even type up tasting notes, or take pictures of the bottle, or do any work to market this whiskey when I know I can just put it online and it's going to sell out in seconds? Why answer emails from customers when I have more customers than I can deal with anyway? Why do anything extra when I know I don't need to?" I think all of these thoughts to myself in moments of frustration and stress. But then I remember why I do it: because it's my job and I respect my customers too much to give them anything less than my best effort. The moment you start losing your respect for the customer, and the instant you think they'll buy your product no matter what, is the moment you will lose your credibility in this business. Customers are smarter than they ever were before and they're getting smarter every day. Treat them with contempt, and you're through.
If you think you can put out a whiskey that tastes half as good, but costs twice as much, you might be right—for now. Yes, only about .001% of whiskey customers read whiskey blogs. True, most consumers don't care about specifics or collectability. Of course, your products are going to sell like crazy no matter what you end up doing. But, if there's one thing every single person in this world wants, it's respect. I want it. You want it. Whiskey customers want it.
I can deal with a lot of stress, loads of extra work, and tireless nights pounding away at my keyboard, but I won't continue to do it without respect. I'm not going to keep busting my ass to make lower margins and support your brands just because some corporate head office boss wants to fund that guest house restoration project on his five acre estate. And, I can promise you, customers are not going to keep paying more for less if they feel it's not justified. They'll wait in long lines, deal with ridiculous raffle systems, and pay a bit of a premium if something's really tasty, but they won't do it if they know you don't respect them. In the end, it's more than just a matter of supply and demand. It's about how supply and demand matters to you, and how you treat people in the face of it.