Industry Updates (Thoughts)

I read this week that Heaven Hill will be launching a new 15 year Bourbon exclusively for their gift shop and that the asking price might be around $250 per bottle. This falls right in line with what I've been hearing around the industry at the moment; that we might be in for a huge sea change concerning one of Kentucky's unspoken whiskey rules: Bourbon is supposed to be cheap. Now there's no law written on paper that regulates what Kentucky whiskey should cost, but there has without a doubt been a collective attempt from the larger players in the industry to maintain Bourbon's blue-collar roots. It's a source of pride among many distillers we've met over the years, as fine Kentucky whiskey has always transcended social class. The result of this unspoken policy, however, has allowed for gigantic mark-ups on the secondary market, as scalpers continue to buy up the inexpensive stock of Kentucky's most affordable (and desirable) expressions, and more than quintuple the price for these now hard-to-find bottles.

When will we finally hit that watershed moment when a number of Kentucky producers say: enough's enough?

Soon, maybe. And you can't really blame them. If Pappy 15 sells for $500 on the secondary market, why should $400 of that profit go to a greasy scalper, instead of to the Van Winkles and Buffalo Trace who actually produced the product? That's what the Bordeaux producers said to each other in 1995 and things have never been the same for the wine industry since. If you're not a wine drinker, here's a bit of background for you:

1995 was a great vintage for Bordeaux. The wines were (and still are) amazing, the prices were reasonable for the level of quality, and the scores from critics were through the roof. At the same time, however, California had producers like Harlan, Dominus, and Opus One selling out their Cabernet-based wines (that were not nearly as revered as their Bordeaux counterparts) for double or even triple what most first-growths were going for. On top of that, there were loads of wine speculators getting rich, buying Bordeaux futures at first-tranche, pre-arrival pricing and tripling their money on the auction market when the wine actually showed up. There were some serious rumblings in the Medoc after that. In 1996, after another fantastic vintage with more outstanding press, the Bordalais started looking around to see what their wines were selling for at auction and on the grey market. They said to each other: "We're leaving millions of dollars on the table by not raising our prices." Latour was sellling its wine for $200 a bottle, only to see that same bottle sell for $800 at an auction later that year. By 2000, which was considered to be the "vintage of a lifetime" in Bordeaux (until 2005, and then followed by the "best vintage ever" in 2009), many Bordeaux producers had tripled their prices, and the wines still sold out quickly. That's when things started to explode.

In 1996, a bottle of Haut Brion would have cost you $189 on pre-arrival. In 2009, we sold them for $1100 (and they sold out in minutes). That's almost a 600% increase in a span of fourteen years without any increase in quality. 1996 and 2009 are both outstanding vintages. The only force that drove that price up was increased demand and the fact that Haut Brion was tired of missing out of profits it felt rightfully belonged to the Chateau (the exact same situation we're seeing in Kentucky). With Bordeaux as a historical example, my question now is: how much longer will Kentucky Bourbon producers hold true to their working-class morals before the urge to raise prices and reap those profits becomes irresistible? 

I've seen signs of weakness beginning to show themselves over the last few weeks. We've been working behind the scenes with a number of producers, and prices for whiskies we had agreed to purchase for one price are now suddenly double what we had originally agreed upon ("things have changed," they tell us). Then this story popped up in the headlines yesterday. Let me say this clearly: I have no clue what's happening at Balcones, but the way the story reads leads me to believe that there's a difference in philosophy between the guy making the whisky and the people looking to profit from it. There's a lot of money to be made in the American whiskey business right now, and with bottles of single malt selling (quickly and easily, mind you) for triple of what comparable bottles of Bourbon sell for (wholesale, that is), I have to imagine it's just a matter of time before that final straw breaks the camel's back.

Before you jump to any conclusions about this situation, ask yourself this: if you made your own whiskey that you sold to friends for $30 and discovered that your friends were secretly selling those bottles for $100 behind your back, how would you react? Let's say you didn't immediately disown all those friends, but instead entered into a business arrangement, selling those same bottles to them for $100 and making that profit for yourself. But then you found out they were now flipping those same $100 bottles for $200! That's what happened to the Bordalais in the 1990s and the prices just kept going up from there. 

I know for a fact that if we were to take our 2014 allocation of Pappy and sell those bottles for quadruple the regular asking price, we would sell it all out in seconds. Luckily, David and I are in control of that pricing and how we allocate those bottles. But what if a new ownership group came in and said, "Fuck that -- you make as much money for the company as possible. That's your new job. Nothing left off the table."

I'm wondering how much longer it's going to be before those types of investors start saying similar things in the Kentucky board rooms. My co-worker told me recently that the Yankees started using StubHub to accurately set the price for their season tickets, no longer allowing that extra profit to go to secondary scalpers. How much longer before Kentucky distillers start using WineSearcher and Ebay to accurately set the wholesale price for their whiskies? We'll have to wait and see! 

 -David Driscoll


Fall is in the Air

The late-evening light of Fall is powerfully nostalgic for me. I'm currently at home nursing a glass of rye with a huge ice cube, while I monitor emails and place more orders for the week. I've got both the front and back doors open, so I can hear the breeze gently ringing the wind chimes on my neighbor's porch. There's a slight chill in the air—just a hint of Fall making its way through my apartment.

I love it. I'm ready for Autumn, and—like a New Englander transitions from white khaki to heavy woolI'm ready to transition from white spirits to the heavier browns.

This bottle of Willett is definitely getting me in the mood.

-David Driscoll


Hot Summer Drankin'

It's been a hot Labor Day Weekend on the Peninsula and there's no A/C in my old school townhouse apartment. The only way to cool myself down last night was to dump glasses of Roca Patron over ice and drink them down until I no longer knew how hot it actually was.

It's been lazy around here. My wife hurt her knee last week, so she can't walk; meaning we've been home-bodies in our stuffy living room, sinking into the couch as the hours continue to tick by. Yesterday evening we watched seven straight episodes of The Twilight Zone on Amazon Prime streaming while the stifling heat slowly turned the fresh berries from the farmer's market into a pool of mushy goo. There's an episode in season three with Charles Bronson and a pre-Bewitched Elizabeth Montgomery as the last two people on a post-Apocalyptic planet. Amazing!

But what to do with all this melted fruit today? Easy! It's time to drink it all up!

If you've got a well-stocked bar you'll never find yourself without an easy solution for dealing with leftovers. I broke out the bottles of rum and mezcal and started whipping up some Labor Day morning cocktails.

First I took all those mushy strawberries off the plate, threw them into the stainless steel mixer with some gum syrup and fresh-squeezed lime juice, and muddled them down into a thick liquid. Two ounces of rum, some ice, and a few shakes: BOOM! A finely-strained strawberry Daiquiri for the Mrs! 

And for me? I took some of those spicy peppers, muddled them into a glass of V8 juice, added some black pepper and Mexican Tajin spice (the secret for this recipe), the leftover lime from my wife's Daiquiri, and two ounces of mezcal from my buddy Jake's Don Amado expression. Voila! A Bloody Maria to start the day with my cold pizza still sitting on the coffee table.

Yes, folks: we really live this way each day. We don't just work at a liquor store; we live the liquor store lifestyle.

-David Driscoll


Taking the Proper Time

I'm a fast-operating person by nature. One might even call me impulsive or impatient. Yet, while all of my natural tendencies towards quick decision-making and even quicker conclusions do give me an advantage in the rapid-fire world of sales and marketing, they work against me in the ultimate evalution of the spirits I am ultimately selling.

Why? Because you cannot properly evaluate a spirit in a few minutes. Hell, I'd even wager to say you can't properly evaluate a spirit in a few days. A few ounces gives you a taste, but not an experience. A taste gives you the chance to write a few tasting notes, but who gives a shit about tasting notes if they're being written by a person taking three minutes to evaluate quality while moving through a long queue of twenty samples? The essence of a whisky can't properly be captured in this way.

Nevertheless, this is how most evaluation is done (as far as I know). The reps come into the bar, they pour us a glass, we do our thing, and then we write our notes. But it's not just us retailers, as few people I know in the industry have the time or the ability to spend a week thinking about one particular whisky before writing their review. Many other people writing online are often basing their notes and reviews on a teeny-tiny bottle they got in the mail that allowed for one small glass of enjoyment. It's enough to get the gist, but maybe not the entire picture. The same thing happens in the wine world as well. Rarely are these 90 point bottles sampled in the same atmosphere in which they will ultimately be consumed (do you think Robert Parker sits down to a steak dinner each time he reviews a new Cabernet?).

We live in an age where people want to be the first to market (or in this case the first to review what's new to market), so we quickly formulate an opinion to capitalize on the wealth of current interest. Speed is an asset when it comes to writing a blog, but not when it comes to understanding alcohol. How important is it, however, to grasp a bottle of alcohol on the most intimate level possible? Maybe it really isn't important at all.

But, nevertheless, let's look at these analogies:

- I didn't realize how amazing a movie Boogie Nights was until my fourth or fifth time through. I went from thinking the film was long and somewhat interesting, to heralding it as one of the top movies ever made in the history of cinema. One viewing simply doesn't allow the viewer ample time to catch all the nuance, or the incredibly-intricate acting on display from Don Cheadle and Phillip Seymour Hoffman.

- My wife bought a pair of shoes a while back that she loved. She tried them on at the store and everything was perfect. Three days later she realized the material was a bit shoddy and was starting to rub her foot the wrong way. After a few days to properly evaluate her purchase she realized she didn't like the shoes.

- Most of the reviews I've read concerning David Bowie's work from the late-90s up to his most recent release The Next Day are unable to appreciate the music outside the context of Bowie's earlier work. After years and years of listening to Earthling, Heathen, Hours, and Reality that I've come to the conclusion that I appreciate them just as much, if not more so, than Diamond Dogs or Ziggy Stardust. There's such a beautiful atmosphere being created on in songs like "I Would Be Your Slave" and the musicianship of all performers is in such incredible sync. Plus, his modern covers of new classics like "Cactus" by the Pixies, or "Pablo Picasso" by Jonathan Richman and the Modern Lovers, are comparable in quality and originality to Johnnie Cash's late work with Rick Rubin. But, of course, I didn't come to that conclusion in a few minutes, or even a few days.

I could go on and on with examples like this, but you already know what I'm trying to say. Many of us do our best to write honest reviews that are released in a timely manner and serve as a guide for purchasing consumers, but there are so many variables at work that ultimately skew our ability to do so. Time, however, is the most important of these variables. I've given samples to friends who initially disliked a particular spirit, but days later came around and said the whisky grew on them (over time). I've tasted whiskies on a Tuesday and hated them, only to come back on a Friday to think they were fantastic (I just didn't taste them at the proper time, I guess).

I'm increasingly attempting to taste samples across larger spans of time for this reason. There are plenty of whiskies I've gone on to really enjoy after initially thinking them to be rather subpar (and vice versa).

-David Driscoll


Natural Progression

I've loved baseball my entire life. 

I played baseball as a kid, as a teenager for my high school team, and in college as part of a recreational league. It's always been my favorite sport.

Until now.

I don't know if it's the realization of a long-standing dream (seeing the Giants finally win the World Series, twice), or that the fast pace of my job has weakened my tolerance for the slow speed of the game, but I have a difficult time sitting down to watch baseball these days. Meanwhile, my interest in football and basketball are at all-time highs. In fact, as I sit at my desk typing up this blog post, finishing up my lunch break before heading back down to the sales floor, I've got the Alabama vs. West Virginia game streaming on my laptop. I haven't followed college football since junior high, but lately I've had the itch to watch these undergraduate warriors bang heads. It's a huge change in direction for my longstanding taste in athletics.

But I guess that's life. 

When you find your interest in whiskey petering out, you might simultaneously find the desire to taste more brandy. Or maybe rum. Even tequila! That's the beauty of drinking: you have options. Even if you consider yourself a whisky expert, you might be tired of playing that role, bored of where the industry has ended up. 

If that's the case, don't fight your own natural progression. Go where your heart takes you. Despite the antics of the hot-hitting Buster Posey and our new boy-wonder Joe Panik, I'm still more captivated by this 10-10 stalemate between two schools I don't really care about. I might even feel a bit guilty about this betrayal if I wasn't having so much fun.

You just have to go with the flow.

-David Driscoll