A Few Things

I was emailing with Todd Leopold the other night about our pop music preferences and he said a very poignant thing at the end of his message:

"It was welcome to see you state (on the blog) that this business is all about relationships.  I would add that ALL business and life is about relationships, and it's these relationships that are the entire point of what we do.  The rest - bottles of rare whiskies, mash tuns, pot stills - are simply tools that gain us these great relationships."

I thought that was a beautiful thing to write. In the end, that's what I look forward to when I go home to make a drink - thinking about the people I've met in this business and how their products have shaped my life. I used to get excited when I drank a wine that got 90 points in the Wine Spectator. That's honestly what once thrilled me when starting out at K&L, mainly because I thought that's what booze was about - about drinking what other people thought was good. Now, however, my pleasure is derived from the people, the story, and the process. I love drinking Todd's gin because Todd's an awesome guy, we have a lot in common, and he actually made this stuff with his own hands! It's the difference between buying a tomato at the grocery store and picking one out of your own garden. They're both just tomatoes, except that they're not. The latter is simply more special.

When you meet the people behind the products your whole perspective changes about drinking. It can work the other way, too! (I can't tell you how many jerks I've met and how terrible their products have tasted after those encounters!) That's been one of the great parts about doing the Good Food Awards over the last few years (by the way, if you're a producer reading this the entry period for 2013 is now open). I've gained a serious insight into the minds behind some of America's great products and it's those relationships that I think about as I make a cocktail or pour some booze over ice. The Leopold Brothers Navy Strength Gin took home top honors last year for its vibrant and clean flavor. As did the one below.

Diane Paulson's Organic Nation Gin is the only two-time award winner at the Good Food Awards for spirits. That means that two years in a row her 100% organic gin has wowed the judging panel, comprised of myself, Jennifer Colliau from the Slanted Door, Amanda Womack from Cask in the city, and a number of other names you'll probably know from the Bay Area booze scene. They're one of the few producers that actually sources organic grain neutral spirit for their base (rye from Idaho) and if you check out their website you can see the efforts Diane and her family take to make their product taste so good. I talked to her on the phone again this week and she's pumped about possibly becoming our first three-peat champion. We just got a hot new bottle price as well ($24.99, previously it was almost $40), which instantly makes it the best bang-for-your-buck gin in the store.

We're just about ready to send out a big email for our two new casks of Mount Gay Black Barrel. If you haven't tried these out yet, you should grab a bottle soon. They're so perfect for summer drinking. Just dump a healthy chunk of the bottle over ice and you're golden.

Mount Gay K&L Exclusive Black Barrel Single Cask #1098 Barbados Rum $26.99 - Earlier this year, David and I were invited to experience the new expression from Mount Gay in the most appropriate setting, at the Mount Gay facility in Barbados. We spent the week experiencing the wonderful Bajan culture. This included High Tea in the cane fields, an authentic luncheon at a traditional Bajan Plantation, etc. We spent some time with Master Blender Allen Smith discussing and experimenting with blending the two types of rum produced, light distilled in a column and heavy coming out of a pot still.  We then moved to the warehouse. Waiting for us were 24 barrels of rum lined up and ready for tasting. Despite the festive atmosphere it was actually quite nerve wracking, in fact, as we'd drawn the short straws and were obliged to pick last after the other six special invitees. As each competitor selected their barrels, David and I let out sighs of relief. Somehow, the two barrels that we had independently agreed were superior to the all rest remained available. Maybe we are just lucky, but probably we just have great taste! Rich, fresh vanilla aromas were accented by light American oak spice. Brighter, lighter flavors on this one as compared to our other cask (#1140), which shows some darker spice and slightly richer texture. This stuff sing on the rocks and does wonders in a daiquiri, as the clean cane flavors pop right out of their citrus frame. This is truly a stupendous example of the high quality of Barbados' premier rum brand. (David Girard)

Mount Gay K&L Exclusive Black Barrel Single Cask #1140 Barbados Rum $26.99 - Last March, David and I flew to Barbados to visit the Mount Gay rum distillery and participate in what would be a celebration of their new label called Black Barrel - a younger, Bourbon cask-aged rum that would offer mixability as well as serious rocks potential. The standard Eclipse has always been the workhorse mixer and the Extra Old has always been one of our favorite sippers. A balance between the two - both in age and price-point - seemed like a fantastic idea. Since the Black Barrel rum would consist of Mount Gay finished in charred Bourbon casks, Remy decided to let a few retailers select their own barrels to bottle exclusively. We were at the top of their list. After careful tasting and note-taking, David and I decided that we should definitely take barrel #1140. It had the mellow cane flavor we love in a Mai Tai or Daiquiri, but added just the right amount of Bourbon spice and richness to accent that soft vanilla. The entry is dark and rich, but the finish is fresh with a flutter of sarsparilla and pepper. You can nurse a glass if you like, but, while delicious, the Black Barrel isn't a rum to sip slowly or concentrate heavily on. It's meant to be drunk in a single afternoon with friends, or dumped into a glass with tonic water and lime. We put away bottle after bottle at the local Bajan rum shacks with nothing but a few ice cubes. This is a high-quality, flavorful, tasty rum from a barrel that will only be available at K&L. (David Driscoll)

Another fun surprise was a new sweet potato vodka being produced south of my hometown of Modesto. Corbin Sweet Potato Vodka is being made in the central valley town of Atwater by the Souza family, who have been working the land for the last hundred years. They've set up a distillery onsite and their first release is this creamy, clean, and polished vodka that really caught me off guard last week. Also, if you've got a gluten allergy, you might want to give this baby a whirl as it's 100% sweet potato-based.

-David Driscoll


The 2013 Half-Yearly Single Malt Report (Part IV)

Mid-Range to Top Shelf Selections

If you've tried looking for an apartment to rent in the San Francisco area lately, you'll have noticed both a sharp increase in rent prices as well as fierce competition for available units. My wife and I recently moved into the vacant two bedroom next door, still a deal in our minds despite the fact that we were paying $200 more per month than the previous tenants. The poor couple that moved into our old place is paying $300 more than we were and they don't get the parking spot we once were allowed to use. Why is the rental market so cutthroat right now? Because none of us middle class folk can afford to buy a house. If you're not in control of your own property, you're at the mercy of the market. Of course, we'd be better off saving up and getting a low interest rate on a townhouse, but we're not there yet.

Those customers who aren't accustomed to spending $100 on their single malt whisky may have noticed that the $40-$70 price range is becoming a lot like the Bay Area rental market. Prices continue to creep higher, $40 is becoming $47, $60 is becoming $72. Meanwhile, however, the $100+ market is remaining pretty stable. The Bunnahabhain 12 has gone from $42.99 to $46.99, while the Bunnahabhain 18 has remained right at $99.99. Highland Park 12 has inched its way from $39.99 to $42.99, and is likely due for another small hike again soon, but the 18 year is still the same old $99.99. In other words, if you can afford to save up a little extra cash you can not only step up the quality of the whisky you're drinking, you can also get a little more bang for your buck.

While the trusted mid-range classics are slowly testing out subtle increases, new arrivals have had no problem debuting their new perceived value. Balvenie 12 year single barrel came right out at $69.99 - BAM! That's right! I'm a 12 year old whisky and I'm seventy dollars, what are you gonna do about it? Arran distillery released a 12 year old cask strength release for $64.99, as did Springbank for a whopping $82.99. It seems that while raising the price of a standard whisky has been controversial, releasing a new one for a new high price seems to draw less heat. All three of the above mentioned whiskies have sold without a hitch from our retail locations, while the rising cost of things like standard Macallan or Glenrothes whiskies have drawn complaints.

Eighteen years seems to be the magic number for "value" in today's market, but how many people view a hundred dollar bottle of Scotch as a "value" product? We've just recently seen a light drop of Yamazaki 18 back into the California market after a long absence. The price is now up to $154.99, which is more than a 50% increase from the last time we saw it, yet in my mind it's still a reasonable deal. I bought myself a bottle this week in spite of the new high price, simply because it's one of the most spectacular flavor profiles in the world - and it's still fifty bucks cheaper than Macallan 18. The Glenmorangie 18, with our hot pricing, has also managed to weather the storm at a ridiculous $84.99, acting as a ballast in the tempest of price increases. Nineteen has also been a lucky number -Glenmorangie's 19 year old Ealanta is delicious for $115.99 and our Glendronach 19 single cask is one of the best sherry-aged malts in the store at $139.99.

Basically, if you're able to invest in some pricier real estate, your money is going to go further. Those of us who have to rent, however, are likely to see continued hikes in the market. We're squeezing margins as tightly as we can right now, as we're practically giving away some of the 12 year whiskies in the store. We won't be able to hold that line for much longer.

-David Driscoll


The 2013 Half-Yearly Single Malt Report (Part III)

High End Collectables

I remember in the mid-1990s when the Monday night war between WCW and the WWF was at its peak. Both shows were trying to sign the bottest free agents in the wrestling business and, since both shows were live each week, there was no telling what could happen. Hulk Hogan jumped ship to WCW. Then the Macho Man. All of a sudden guys like Rick Rude and Curt Hennig were showing up in WCW. Fans were thrilled, until the novelty of watching wrestlers crossover between promotions wore off and all the tricks were played out. Both promotions had become so dependent on a surprise face each week that viewers considered a show disappointing if no one new showed up.

The same sort of pop phenomenon started to happen with the Coachella music festival in Southern California each year. The concert had managed to bring many classic rock acts out of retirement and back on to the stage, to the delight of music fans everywhere. The Pixies reunited for Coachella in 2004. The following year they got Peter Murphy to reconvene with Bauhaus. There were rumors of a Smiths reunion for 2006. Or maybe even Led Zeppelin. But, alas, all we got were Depeche Mode and Tool. "Bummer," people said (but not really, right? Who doesn't love the Mode?). The expectations had become almost impossible to live up to at that point.

The problem with constantly outdoing yourself is that you're constantly under pressure to keep outdoing yourself. When the next new hit isn't bigger and better than the previous one, disappointment usually follows. In my opinion, the high-end segment of the single malt whisky industry is suffering from expectations that it can never live up to. As we mentioned yesterday, part of the reason one could buy such great whisky back in 2005 was because producers were sitting on bulk quantities of old booze. Rumor has it that Rachel Barrie was dumping twenty-five year old Ardbeg into the Uigeadail at that time. No wonder it tasted so good! Yet, with demand at an all time high, there's no way a producer could justify doing that today. So how does the whisky industry follow that act?

While single cask whisky prices have become rather exorbitant compared to what they once were, they still pale in comparison to what most luxury distillery bottles run these days. About a week ago I wrote an article about my shopping experiences in Las Vegas, where I briefly considered buying my wife a Chanel purse before thinking about all the other things we could get for the same amount of money. All of a sudden that $250 purse at Kate Spade looked like child's play. It's amazing how expensive some things seem until you put them into perspective. Today I tried doing that with some of the high-end whiskies we have in stock right now. The new Bunnahabhain 40 year old is $3000 a bottle. It's supposed to be great. But for that money I could get a bottle of our amazing Port Ellen 30 cask for $600, a bottle of the ethereal 1979 Glenfarclas for $300, a bottle of the ultra-rare and decadent 1980 Glenlochy for $450, and still have $1650 left over to blow on a wine, clothes, and food. All of a sudden those casks seem down right cheap.

Macallan 25 is now at $900 a bottle – if you can even get it. Again, that's the same as a bottle of the Port Ellen 30 along side the 1979 Glenfarclas. If you really want to understand what's happening with high-end hooch, look at the Ladyburn cask we bought three years ago. We sold those for $300 at the time. Last year when we went back to Signatory in search of a second barrel (which they had) they wanted $800 wholesale!! That would put the retail at over $1000 a bottle! Again, we have to remember that these older whiskies were the result of a glut, a state of overproduction that resulted in a surplus of whisky across Scotland, left untouched as they continued to mature for decades. I doubt that anyone is putting down casks today with the intention of aging them for three decades. "Oh, those casks over there? Those are reserved for our 2043 edition of Macallan 30." Yeah right. When they can't even keep the 12 year in stock, you know most casks will never even reach their 13th birthday.

Part of the reason we bought in big on the Sovereign Port Ellen, older Glenfarclas casks, and things like Glenlochy from Signatory last year is because we knew it might be the last shot at doing so before prices really got out of control. We were right. While $300 to $600 isn't inexpensive for most shoppers, it pales in comparison to the garbage we're being peddled today. I'm seeing price sheets that make my head spin. Old whisky is just something you're going to have to learn to live without unless you're willing to overpay. I can deal with $600 for top quality Port Ellen – the most legendary of Scotland's "lost" distilleries. We've only got about 30 bottles left, anyway, and we're in no hurry to get rid of them. Every year that goes by only makes them rarer and more valuable. But $600 for 22 year old Ardbeg? $600 for 25 year Laphroaig?

I think we'll be taking a break from the collector's market for quite some time.

-David Driscoll


Buffalo Bowl I Ends in Defeat

The ball was in my hands. And then it wasn't. Fourth down had passed and we had lost the game. Jason and Jim would win what would come to be known as Buffalo Bowl I - an epic two-on-two touch football battle in the adjacent Redwood City parking lot during 4th of July lunch. We had the smoker out, as well as the grill. Jim Barr prepared his special Buffalo Burgers in advance, ground beef and turkey patties packed with numerous herbs, spices, and cheeses. Many of us brought side dishes and salads. We dined outdoors before picking up the old pigskin and heading out to the gridiron.

With only two minutes to go before lunch ended, I headed straight towards El Camino, my legs burning, sweat pouring from my head, before slanting towards Jim's Forerunner. The ball was in the air, hanging, spinning, merging into the blistering sun above our heads. Alas, I couldn't hold on and the game ended with a 21-14 victory for Jim and Jason, while Joel and I hung our heads in defeat. We lost gracefully, however. Hands were shaken, hive-fives were slapped as we headed back into the cool interior of the retail store.

Minutes later, in between a carry-out order, the trophy was awarded and risen high into the air. Buffalo Bowl I ended in defeat for the customer service manager and spirits buyer, but legends were made this day. This was a day for meat. A day for men. A day without surrender, or dishonor.

-David Driscoll


The 2013 Half-Yearly Single Malt Report (Part II)

Single Barrels

No segment of the single malt industry has been more impacted by the upswing in popularity than the single cask business. What was once a unique way for a handful of independent producers to make some cash on the side suddenly became the premier way to find great whisky at a great price. Older casks of Laphroaig, rare malts like Brora and Banff, cask strength versions from producers regularly unavailable, were all on the shelf for the consumer who wanted to branch out and diverge from the regularly-schedulded branded options. The blended whisky business had seen producers and blending houses swap barrels regularly for years, resulting in numerous warehouses all over the country filled to the brim with different whiskies from different distilleries. The only problem was that these bottlers were dependent upon other producers for their supply. When the distilleries started to worry about their own rations, the well began to dry up and many independent bottlers began scrambling just to keep up with their own demand.

One thing you have to understand, however, is the reason there were so many older, ancient, rare, and delicious single malt casks available is because no one was drinking single malt whisky. So there it sat, getting older, waiting for a day when it might find some use. I remember Stewart Laing telling us last year that they would have had several casks of 30 year Brora to sell, but they had already dumped most of it into their twelve year old blended brand about a decade ago. "We didn't know what else to do with it," he said, like a kid apologizing to his parents. "Obviously, had we known there was going to be a ressurgence for this stuff we would have sat on it, but we had already been sitting on it for twenty years!" Once the hobby of cask hunting began to really take off at the end of the 2000s, warehouses were being emptied faster than they could be refilled and the selection really started to dwindle.

Over the last six months, I've had many a single malt collector say to me, due to the recent price hikes for single barrel malts, "I'm done buying whisky for now. I'm just going to drink what I have." In a sense, that's what many independents like Chieftain's, Duncan Taylor, and Gordon & MacPhail are doing as well – they're looking at the current market and deciding that the price for new casks is simply too far out of whack. They're circling the wagons and focusing on their own labels and distilleries. Ian McCleod is far more interested in Tamdhu and Glengoyne than Chieftain's. G&M is steadily pushing Benromach over new independent bottlings. A.D. Rattray has a big development currently in the works, while Douglas Laing expects to make a bid for their own distillery sometime soon. Basically, these guys are all looking for ways out of the independent cask trade and into the production side of the business. They don't have enough casks to sell anymore, so they're not in any hurry to be rid of them. Since they're not in any hurry to sell, they're certainly not in any hurry to deal.

If you're wondering why our selection of single barrel single malt whisky has diminished over the past year, this is the main reason: price. David and I are not buyers who will simply buy things because we know they'll sell. We could buy a case of practically every single cask whisky that comes our way and someone would eventually buy it all – that's the great thing about the internet these days. However, neither of us wants to see a shelf with $150 bottles of Laphroaig 15 or $200 bottles of Ardbeg 12. That makes us part of the problem rather than part of the solution. We've also passed on many selections over the past six months because we have the capability of doing our own importation now, leading to much fairer pricing for consumers. The only problem is that the process of bringing whisky over the Atlantic is a long and arduous one, so there tend to be serious holes in our inventory while we wait for the newest batches to arrive.

While I do expect prices for standard single malt releases and older expressions to eventually level out over the next year, I don't forsee a future where old, rare, and interesting single casks re-emerge on the shelf. The spoils of the last decade were based on the serious glut of overproduction in the 1980s. No one ever set out to create 35 year old barrels of Banff, or a small collection of Ladyburn casks. It happened because no one wanted to buy these whiskies. With the demand of single malt whisky where it is today, however, we're not likely to see this segment of the market ever return to where it once was – at least not anytime soon. We're still able to find some great values from Signatory and a few newer bottlers that have popped up recently, but nothing like we once did only a few years ago. David and I simply scratched our heads at some of the cask pricing we saw this year.

It's going to take another glut to ever produce the circumstances necessary for serious, affordable, single cask selection. Plus another few decades of disinterested consumers to allow all of it to mature. Only when distilleries overproduce do they start shedding barrels, but most are still playing catch-up.

In other words, don't wait around.

-David Driscoll