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K&L Spirits Tasting Schedule:

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8/20 - San Francisco: No Tasting

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2014 K&L Exclusive Scotland Whisky

Kilchoman K&L Exclusive 100% Islay Single Bourbon Barrel #344 Cask Strength Single Malt Whisky IN STOCK NOW!


Kilchoman K&L Exclusive 100% Islay Single Bourbon Barrel #345 Cask Strength Single Malt Whisky IN STOCK NOW!


1990 Glenfarclas K&L Exclusive Single Malt Whisky PRE-ORDER


Glenfarclas "The Faultline Casks" K&L Exclusive First Fill Oloroso Sherry Casks Single Malt Whisky PRE-ORDER


1997 Bunnahabhain Heavily Peated 16 Year Old K&L Exclusive Chieftain's Single Barrel Cask Strength Single Malt Whisky IN STOCK NOW!


1998 Laphroaig 15 Year Old Signatory K&L Exclusive Single Refill Sherry Butt Cask Strength Single Malt Whisky IN STOCK NOW!


1983 Caol Ila 30 Year Old Signatory K&L Exclusive Single Barrel Cask Strength Single Malt Whisky IN STOCK NOW!


2002 Bowmore 11 Year Old Signatory K&L Exclusive Single Refill Sherry Hogshead Single Malt Whisky IN STOCK NOW


1992 Bruichladdich 21 Year Old Signatory K&L Exclusive Single Barrel Cask Strength Single Malt Whisky IN STOCK NOW!


1988 Balmenach 25 Year Old Signatory K&L Exclusive Single Barrel Cask Strength Single Malt Whisky IN STOCK NOW!


1997 Benrinnes 17 Year Old Signatory K&L Exclusive Single Barrel Cask Strength Single Malt Whisky IN STOCK NOW!


1997 Dailuaine 16 Year Old Signatory K&L Exclusive Single Barrel Cask Strength Single Malt Whisky IN STOCK NOW!


1995 Glen Elgin 18 Year Old Signatory K&L Exclusive Single Barrel Cask Strength Single Malt Whisky IN STOCK NOW!


1997 Glenlivet 16 Year Old Signatory K&L Exclusive Single Sherry Butt Single Malt Whisky SOLD OUT!!


1981 Glenlivet 32 Year Old Signatory K&L Exclusive Single Barrel Cask Strength Single Malt Whisky IN STOCK NOW!


1996 Bowmore 16 Year Old Faultline Single Cask Strength Single Malt Whisky IN STOCK NOW!


Bladnoch "Young" K&L Exclusive Heavily Peated Single Barrel #57 Cask Strength Single Malt Whisky IN STOCK NOW!


1997 Glengoyne 16 Year Old K&L Exclusive "Sovereign" Single Barrel Cask Strength Single Malt Whisky IN STOCK NOW!


Kilchoman K&L Exclusive Single Bourbon Barrel #172 Cask Strength Single Malt Whisky IN STOCK NOW!


Kilchoman K&L Exclusive Single Bourbon Barrel #74 Cask Strength Single Malt Whisky IN STOCK NOW!


2013 K&L Exclusive Scotland Whisky Still Available

2005 Island Distillery 7 Year Old K&L Exclusive "Exclusive Malts" Single Barrel Cask Strength Single Malt Whisky 750ml IN STOCK NOW!


2001 Royal Lochnagar 10 Year Old Faultline Single Barrel Cask Strength Single Malt Whisky 750ml IN STOCK NOW!


1995 Glendronach 18 Year Old Single PX Barrel Cask Strength Blended Scotch Whisky 750ml IN STOCK NOW!


1994 Benriach 19 Year Old Single Bourbon Barrel Cask Strength Blended Scotch Whisky 750ml IN STOCK NOW!


1992 Longmorn 21 Year Old Faultline Single Cask Strength Single Malt Whisky IN STOCK NOW!


1987 Mortlach 25 Year Old Faultline Single Cask Strength Single Malt Whisky IN STOCK NOW!


Saturday
Feb182012

Breaking Down Value in Single Malt Whisky

I've been having this conversation via email with a few customers lately, so I thought why not do a post about it here?  To me, this is a flawed argument to begin with, so know that I don't think about whisky in these terms, but it's something people should be aware of none the less.  There's the old adage that value comes from whatever you think is good, but that isn't always the case.  If you think a white whisky is worth $100, then should it cost that much?  NO!  Just because one person thinks something tastes good does not mean that it is good or should merit a higher price tag.  In my opinion, the cost of a whisky should be based on the following reasons:

- cost of production (i.e raw materials, time, labor, barrels, small batch vs. large scale, etc)

- length of aging (the longer it takes to make, the more valuable it should be)

- rarity/desirability (mothballed distilleries, small production)

- high proof vs. low proof (higher proof gets a higher taxation rate which drives up the cost)

- quality (ultimately the least important factor in deriving value, except concerning source)

Let's break each of these categories down:

Cost of production - What kind of grains were used?  Where were they sourced from?  Were they organic?  How much did it cost to distill each batch?  How much can be made each time the still is run?  A continuous still can pump out whisky faster and more efficiently than a smaller pot still, which in effect lowers the cost. What kind of barrels were purchased - new oak or used oak?  There's a big price difference between the two.  The cost of production should be the first step in determining the value of a whisky (unfortunately, the consumer will never know exactly what that is, but we can investigate!).

Length of aging - Should something that sat in a warehouse for ten years be worth more than something that only sat for three years?  That depends on the cost of production, of course!  Both costs being equal the answer is yes.  However, if something was made from cheap grain and mass-produced on a column still like a factory, should that ten year old spirit be worth the same as a ten year old, 100% Islay Kilchoman?  I don't think so.  Also, what kind of wood did it mature in?  Ten years in a fourth-fill hogshead isn't the same as ten years in a second-fill sherry butt or first-fill bourbon.  The barrel means everything in determining the value of age.

Rarity/Desirability - Are we dealing with a closed distillery here?  Port Ellen and Brora are expensive because they're no longer in production, plus they're highly sought after.  Ardbeg limited editions are rare because they decide to make less of each particular whisky, therefore they're highly desired, but the scarcity is created by Ardbeg - they chose to make less.  That lowers the value in my opinion, but if people want it badly enough there's no telling how much Ebay can drive that price up.

High Proof vs. Low Proof - This one is straightforward.  The higher the percentage of alcohol in the bottle, the higher the taxes paid on the whisky.  The higher the taxes, the higher the cost to make up for those expenses.

Quality - Ultimately this is the least important factor because it's the least objective (notice I didn't say "it's the most subjective" because quality isn't entirely based on opinion).  After calculating how much it cost to create the whisky, how long it spent in the barrel, the final proof of the spirit, and the amount of it there is to sell, the price of a whisky is finalized.  Quality doesn't come into play until the customer actually buys it.  If a company, distributor, or retailer were ever to raise the price of a whisky significantly because they thought it was better, it would really piss people off.  "Why do you charge more for Lagavulin 16 than BevMo?" Because I think it's better!  Yeah, right. However, quality does play a role when determining, say, which Macallan to buy - the distillery bottle or the independent release.

Ultimately these are the main components in any formula to determine value in a single malt.  What did I leave out?  Single barrel, for one.  Single barrel whiskies aren't inherently more valuable than vatted whiskies.  They're just more limited, which would fall under the rarity category.  That being said, however, I do think that great-tasting, single-barrel whisky is rare.  Most barrels that we taste are not as impressive as the distillery blends.  Independent bottling vs. distillery bottling is another factor I left out because I think it falls under the quality tab.  Macallan should have the best Macallan whisky, therefore their stocks should be worth more than Signatory's or Gordon & MacPhail's.  However, this isn't always the case and it's not an absolute.

The reason this whole conversation came about is due to the new Glenfiddich Cask of Dreams release and its $99.99 price tag.  There was some sentiment that whisky prices were getting too high and out of touch with the consumer.  I agree that this is an overall trend, but let's break down the case of Glenfiddich. 

Cost of production - new American oak barrels (not cheap),

Age - 14-16 year old whisky chosen from the distillery

Rarity/desirability - limited availability, high desirability

Proof - higher at 48.8%

Quality - very good, distillery stock

Let's look at some similar whiskies and see if the Glenfiddich price point is too out of whack.  Lagavulin 12 year old - $99.99.  Same specs as the Glenfiddich, but two years younger and maybe a higher desirability rating.  Either way, you're paying $100 for 12 year old whisky.  You could get 12 year old Aberlour for $35 or 12 year old Glendronach for $48, but neither are limited, nor are they high proof.  Our 11 year old Blair Athol cask came in at around $70, while our Glendronach 16 year still sells for $115.  Both are limited and high proof, like the Glenfiddich Cask of Dreams.  At 14 years of age, the CoD would fall right in between those at $100. 

Again, this isn't the best way of looking at whisky.  Ultimately, we could ask any producer if they could have made it for less and the answer could be yes or no.  That's like asking a business what their margins are - exactly how much are you taking us for?  No one's going to let us in on those numbers.  In the end, all we can do is evaluate what we know.  To me, the Glenfiddich Cask of Dreams isn't cheap, but it isn't exorbitantly priced either.  It's line priced with many whiskies of a similar production, age, rarity, proof, and quality.

-David Driscoll

Thursday
Feb162012

Higher Pricing

A good customer of mine emailed this to me a few hours ago, after I sent out the secret email newsletter featuring some hot new acquisitions:

"Hi David - is it my inattentiveness, or has there not been much in the way of interesting whiskies priced below the $85 and above range lately?"

To which, I replied:

It’s not your inattentiveness – prices are going up.  $100 is the new $60 for single malts.  They know they can get it, so they’re pricing it accordingly. 

This isn't an accident, folks.  Small batch, limited edition - it's the way of the future.  Limited quantity gives the producer the right to charge more, and the fear of missing out on something fantastic has the public in a hurry to go along with it.  I've said it before, and I'll say it again, every company has been watching Ardbeg, Pappy Van Winkle, etc, and the hype that accompanies the release of in-demand, but very-limited whiskies.  While formerly it was proper business sense to create something great and then make it as widely available as possible, this somewhat obvious logic doesn't apply to the boutique realm.  Look for 2012 to be the year of "limited release" where companies purposely make less of a product with the intent of making it more attractive to collectors.  The whisky machine is on to us - they know we want to try new things, not keep drinking the same old brands.

The problem is that the big-budget, limited edition malts have been damn good so far!  I absolutely love the new Glenmorangie Artein, and the Glenfiddich Cask of Dreams that I tasted today was superb.  I don't think the prices are too far off from where they should be either.  Believe me though, as soon as I see a cheap attempt to capitalize on this trend, I will call it out.  Until then......I guess we should be happy there are so many great options!

-David Driscoll

Thursday
Feb162012

Cask of Dreams?

Photo from msnbc.com MarketwireThere was a lot of PR surrounding Glenfiddich's newest limited edition release - the "cask of dreams."  They went on a big campaign around the U.S., literally rolling barrels of whisky through the streets of major American cities, where people could sign the barrels and record their own dreams onto the wood.  That's a great story, but it doesn't make the whisky taste any better, does it?  Luckily for Glenfiddich they've created a delicious single malt that lives up to the hype they've invested in it.  After transporting the decorated casks back to Scotland, the unused American oak was filled with whisky aged 14 years and older where it rested for three months, picking up more vanilla from the uncharred wood.  The barrels were then blended together to create a limited, 3500 bottle American release that's definitely worth any single malt drinker's time.  There's a lot of vanilla - a ton of it - but it's never overpowering.  Lively spices, sweet grains, high-toned fruits, and supple caramel all come at once, dodging in and out over the palate.  Everything stays completely in balance and the finish leaves trails of resin with cloves and rich oak.  Best of all, they bottled it at 48.8% which gives the whisky the heft it needs to battle all that flavor.  Glenfiddich never seems to excite the more experienced malt drinker, but I think that's all about to change.  This is much better than last year's Snow Phoenix, so they must be listening to feedback.  I think it's very well made and it makes me much more interested in tasting future Glenfiddich expressions.

We'll be getting 120 bottles tomorrow.  Email will go soon.  Grab 'em while they're here.  Should be about $99.99

-David Driscoll

Wednesday
Feb152012

Almost Ready....

Got the labels in the mail!

Went to the distillery to put one on a bottle!

Dave Smith tweaked a few things and we did the final tasting.

Now we just have to get it out of the stainless steel and into the bottle!  Friday is the day.

Faultline Gin by next week?

-David Driscoll

Tuesday
Feb142012

The State of the Independents

Most of you reading this blog regularly understand what an independent bottler is and how they function. However, as we're adding more new readers here every day, I'll refresh everyone's memory just in case.  Along side the major whisk(e)y brands, there are numerous other Macallans, Caol Ilas, and Highland Parks not labeled with the standard packaging we're familiar with.  It's because, while these whiskies were still made by their respective distilleries, they are from barrels long sold off to another party.  It has long been tradition in Scotland for a distillery to sell off extra casks in times of surplus, which has allowed for independent companies to purchase whisky they did not make, create a label of their own, yet still market the single malt under the banner of the distillery that provided it. 

Chieftain's, A.D. Rattray, Signatory, Gordon & MacPhail, and Hart Brothers, just to name a few, are all examples of independent bottlers.

I've become pretty good friends with Stan Morrison from A.D. Rattray over the last few years.  We both enjoy going out to new restaurants in San Francisco when we have the time, so we met up last night at Locanda for some delicious Italian cuisine.  I ordered a cocktail, Stan wanted some rye so he asked what I would suggest.  They had Pappy 13 on the menu.  I told the waiter to bring him some of that, if they indeed had it available.  The waiter said indeed they did.  Then he came back five minutes later and said, whoops, indeed they didn't.  "Not surprising!" I said.  Stan's family used to own Bowmore distillery (along with Auchentoshan and Glen Garioch) on Islay before Suntory bought them out in 1994.  They used some of their backstock to create A.D. Rattray, where, not surprisingly, they still put out amazing expressions of Bowmore, amongst other distilleries.  We generally talk about non-whisky related topics, but naturally we're going to eventually talk shop.  Last night, Stan echoed some of the sentiment about independents that I've been hearing for a while now.  Getting new casks is currently not easy.

"Why would a distillery ever sell their casks off?" I asked at one point.  While I know there's profit to be made, a distillery probably stands to make as much percentage-wise as K&L does from Pappy Van Winkle - which is to say almost nothing.  What is really to be gained other than allowing someone else to capitalize on your name?  Stan said that the whisky industry has always been full of peaks and valleys.  Producers up their production in times of profit, and, should they ever find themselves in a glut, they can sell off excess whisky to other interested parties.  The independents are always there to keep the balance in check.  What's interesting right now, however, is that we're in the middle of a recession, yet sales of whisky are through the roof.  You would think that this would be a moment of excess, yet distilleries are finding themselves short of supply.  Stan thinks this will all right itself in a few years since most producers are currently increasing their operations, but none the less, he said that independents are all scrambling to find a way of controlling their own production.

Cheiftain's, in my opinion, is sitting prettiest at the moment.  They purchased Glengoyne from the Edrington Group in 2003 and found themselves in a wonderful position.  You see, Glengoyne is an ingredient in some of Diageo's blended whiskies, which means that Diageo needs to offer up something in exchange - be it casks of Lagavulin, Caol Ila, or what have you.  Not only has Chieftain's found a way to control its own supply of whisky, it managed to sustain its independent barrel trade as well by finding a permanent stream of access into Diageo's vault.  That's why they can make the Isle of Skye blends with Talisker whisky.  While Signatory bought Edradour and Gordon & MacPhail purchased Benromach, neither of those distilleries are nearly as successful, at least not here in the states.  Duncan Taylor tried to purchase Glendronach, which would have been a fantastic move, but they were outbid by the Benriach group.  Stan has admitted to a few inquiries into available real estate, but nothing has materialzed so far.  I think they've got something up their sleeve, but I didn't press him for what it is.

Stan also talked about how other invested groups are planning to build new distilleries in Scotland, an idea that both of us find terrible for the moment.  However, back here at home, many U.S. companies are following that model.  High West, Templeton, Whistle Pig, and Willett are all examples of independent bottlers who have recently begun, or plan to begin, their own distillation while they currently sell whiskey from other distilleries.  They're all facing the same problems here in the U.S. - not enough whiskey.  Buffalo Trace isn't selling - they've already announced that Sazerac, Eagle Rare, and Elmer T. Lee are out for 2012, so how could they have extra for anyone else?  LDI has been purchased, so the source for High West, Templeton, Bulleit, Willett, Big Bottom, Hooker's House, Redemption and other independently-bottled brands has dried up.  How else do you get more product other than by making it?

The problem with making it is time.  By the time your new product is ready to sell, the other distilleries will have caught up in their own production and will likely have extra whisky again.  Or maybe not?  How long will sales continue to grow?  What if China collapses and the Asian market shrinks as fast as it has expanded?  These are all business decisions I'm glad I'm not facing.  Meanwhile, the quality of independently-bottled whisky has proceeded to decline.  If we're in a take-what-you-can-get market, then that's what were going to be presented with.  It's the main reason that David and I decided to go to Scotland ourselves. Hopefully this May we'll still be able to find some fantastic options.

-David Driscoll