More Dialogue

Since we're talking about rising whisky prices, I've written a new, three-part dialogue for your perusal.  The last piece I wrote that included typed conversation seems to have gone over well, so I'm adding a follow-up here to help illustrate more important issues facing the whisky industry right now.

The first part is titled: In the spirits section at K&L

David is seen stocking the shelves, a customer enters from stage left

David: Hello sir.  Welcome to K&L. Let me know if I can help you find anything.

Customer: Actually, I'm looking for a bottle of ______.  Can you tell me where it is?

David: Certainly, it's right over there on the left, second from the end, on the bottom shelf.

Customer: Wow. $52.99?  I can get this at MevBo for $42. 

David: Unfortunately the price has gone up recently, so we had to raise our price as a result.

Customer: So you can't match MevBo's?

David: Normally, if it's just a matter of different pricing, I'd be happy to.  In this case, however, $42 is less than my wholesale cost.  MevBo is offering that price because they haven't bought in since the increase in cost.  It's not only that their price is lower than ours, it's that their current wholesale cost reflects a purchase from many months ago when they bought volume at the old price. While I can't match their price, I'd be happy to call the MevBo down the street, however, and have them hold you a bottle.

Customer: I'd rather buy it from you.  Can't you just match the price?

David: Well, if I do that I'm actually losing money.  It's one thing to make less profit, which I am happy to do in the name of customer service, but I can't actually lose money on each sale.  I can offer you a discount, but I can't match that price. You see, when liquor companies raise their prices there are some stores that still have inventory with a retail tag that reflects the old wholesale price.  We move through our inventory faster, so we have to change our prices first.  Unfortunately, in times of transition like this, that means we have to be the store with the higher sticker.

Customer: So MevBo has better deals than you, huh?

David: In this case, yes.  It just so happens that they haven't had to repurchase the item at the new wholesale cost.  Eventually, they'll have to raise their price as well.  All of these whisky companies are raising their prices right now and it's really a pain.  My margins keep getting thinner because I want to keep my prices consistent and avoid situations like this.

Customer: Wow, what a bummer.  I guess I'll have to go to MevBo. 

David: I'm sorry about that, really.  It's not us raising the price.  We're simply reacting to the increase ourselves.

Customer: I don't understand anything you just said.  All I know is that MevBo has better prices than you.  I'll just go there first next time.

End scene

Wow, that was intense!  I was wondering what was going to happen the entire time!  Was David going to lower his prices and take the hit?  Was the customer going to be sympathetic to the changes of the market?  Riveting stuff!

OK - now for the second part, titled: What the F?!

A retail store manager is seen sitting at his desk. He is talking on the phone to a brand manager, whose voice we can hear through a speaker.

Manager: Listen, all I know is that I've had customers calling all day, wondering if we'll price match the ______ whisky with K&L.  I can't match that price!  What the F is going on?  Did you guys cut them some kind of a deal?

Brand Manager: Not that I know of! They must be choosing to make less money per unit and move volume instead.

Manager: This is total bullshit.  There's no way that any retailer can sell the ________ for $77.99 and make any money.  That's practically what that whisky costs wholesale!  I can't even pay my electric bill with $1 per bottle profit margins! You must have cut them a backdoor deal and now you're just trying to cover your ass!

Brand Manager: I promise you, we didn't! They paid the exact same price as you did!

Manager: Well I'm not matching that price, but if K&L has it for $77.99, then just how the F am I supposed to sell it for $100!  Everyone will think that I'm overcharging them when in reality they're just offering ridiculous pricing.  I'm just going to close it out and get rid of it.  I can't compete on this anymore.

Brand Manager: Let me see what I can find out.  I really don't want you to have to stop carrying the product.  Just give me few days to see what's going on. 

End scene.

Jeez.  This is a really intense story so far.  I wonder what's going to happen next!  Let's find out in part three, called: Now You Know How I Feel

David is shown sitting at his desk, eating a sandwich when the phone rings. He picks up and we hear the brand manager greet him through the speaker.

David: Hi, this is David.

Brand Manager: David, it's Larry over at _________.  How's it goin'?

David: Hi Larry, it's going fine.  What's up?

Brand Manager: Well.....not so good.  We've got a problem and it pertains to your price for _______.  You're selling that for $77.99 and that's a little lower than we're comfortable with.  We've been getting complaints from other stores all day and they're threating to drop the product if you don't change your price.

David: Wow, that's a problem.  You know what else is a problem?  My price for _______.  I'm at $52.99 but other stores are still offering that product for $42.  People think I'm overcharging them for the bottle because there are still a bunch of stores nationwide with the old price.  I've been getting complaints all day as well.

Brand Manager: David, you know that we raised the price for everyone, not just you. 

David: That's true, Larry.  However, I'm still a smaller retailer who can't afford to buy in before the increase like other huge chains can do.  While they're still sitting on older inventory with hundreds of cases, I'm moving through my inventory faster and I'm forced to raise my prices first.  The problem is that customers don't understand this, so they think I'm just charging them more.

Brand Manager: But eventually, the other stores will sell through and raise their prices as well.

David: True, but with so many increases happening across the board, there are always going to be whiskies that I simply am not competitive with because someone, somewhere, will have a deeper inventory than me.  We're getting national attention now and I have to be able to compete with Chicago and New York, too.  But that's OK because I've figured out a way to balance that all out.

Brand Manager: What's that?

David: For every product that goes up in price, I'll pick a product from the same company and lower it.

Brand Manager: How is that going to even out your profits?

David: Oh, I didn't mean financially.  I meant it would even out the amount of complaints we would both have to hear.  You see, producers never take any flack from customers.  The retailers do. But now, for every complaint about price increases I hear from customers, you'll have to hear a complaint from another retailer.  So we'll be even!  What do ya say?

Brand Manager: I think you've lost your mind.  This is the craziest thing I've ever heard.

David: Maybe to you it is.  However, my customers are sick of the same whisky they bought last week costing ten dollars more this week.  It's frustrating, so I'm going to stick up for them and offer some relief. 

Brand Manager: I understand your frustration, but isn't there anything else we can work out?

David: Sure.  The next time you lower the price on a product, I'll respond by raising the price on one of mine.  Like the ______ whisky that's causing so much trouble right now.  Just lower the price on something and I'll bring it back up again.  That way we'll always have balance.  Balance is important.  So is regularity.  If you eat a balanced diet it helps to keep you regular.

Brand Manager: I think you need to take a break, David. You sound like you're losing it.

David: Nice talking to you, Larry!

End Scene.

Wow!  What's going to happen now?  Stay tuned for more exciting dialogues to find out!

-David Driscoll


I Will Single Handedly Fight This

I've been emailing with customers all day about the current state of the whisky market. I mentioned on this morning's email newsletter that the 1988 Glenrothes took a big price increase today, so I decided not to reorder it rather than raise my price by $20 per bottle.  Laphroaig 10 also took a hit, but I did adjust it because it was less drastic (now $42).  Because Laphroaig 10 is a whisky that we sell in high volume and that I really love personally, it's not something I'm going to quit on.  That whisky was probably priced below market value to begin with. The 1988 Glenrothes, however, won't really affect our sales whether we choose to carry it or not.  I can find plenty of other whiskies to take its place.

The perceived market value of a whisky is important to the equity of each particular brand.  When a brand wants to be seen as higher-end or more luxurious, they'll raise the price to reflect that desire. What would happen, however, if I started buying up all the big boy whisky in California and just lowering their prices?  Not on the bottles that pay my salary, like Lagavulin 16 or Ardbeg, but on the other whiskies that are not particularly key players at K&L.  What are the whiskies that people love, but are a bit too expensive to purchase on a whim?  Oban's a great example!  Everyone loves Oban 18, but it's usually about $100 or more at most places. $100 is a good price for that whisky because it is quite elegant. That being said, what if I called up the distributor for Diageo, bought up every last bottle of Oban 18, and then just sold it for less?  Would other stores follow suit?  Would that then pressure a large whisky company to lower its price?  What would happen? I don't really need to sell Oban 18, but it's nice to have.  Therefore, if I just blow it out on volume it should all even out for K&L.  Now I'm curious!

Let's just get on the phone here.......yes, this is David at K&L, how much Oban 18 is in stock?  36 cases?  OK, I'll take all of them.  Delivery tomorrow.  Redwood City please.  Thank you!  There.  It's done.  A huge truck of Oban 18 is coming to Redwood City tomorrow and I am just going to sell it for less. True, it's going to ruin the market price for Oban 18, which is usually a $100 bottle of whisky, but what else can we do? For every whisky company that raises its price, I will counter them by taking one of their whiskies and lowering its price.  Tit for tat.  Let's see how this works.  I refuse to let you all get priced out of drinking great whisky.

Oban 18 Year.  Was $100.  Now $77.99.  That makes for the lowest price I can find online. Who's next?

UPDATE:  I said "tit for tat," so let's add Glenrothes to this list.  Diageo raised the price of Ron Zacapa, so I've lowered the price of Oban 18.  Glenrothes raised the price of the 1988, so I'm now lowering the price of the 1995.  1995 Glenrothes: was $65.99. Now $51.99.  This is really fun!  I hope you're all enjoying it as much as I am!

-David Driscoll


New K&L Single Barrel Four Roses

Four Roses K&L Exclusive OBSO Single Barrel Cask Strength Bourbon $59.99 - Usually when we purchase a fantastic single barrel of Four Roses Bourbon, it comes in around ten and a half years of age or younger. When we tasted samples for this one, we noticed right away the darker complexion and the extra wooded flavor. Sure enough, this barrel was older - 11 years and 7 months to be exact. This being our second batch of OBSO (a 60% corn mashbill with a healthy dollup of rye and yeast strain "O"), we were hoping to recreate our previous whiskey, which we lovingly called "the iron fist in a velvet glove." What we got, however, was something far more powerful and out of control than we ever could have imagined.  I would refer to this whiskey as "the iron fist that just punched you in the mouth" because this Bourbon is a beast!  At 63.3%, our new barrel brings the heat, the spice, and the wood at an intensity most drinkers aren't ready to handle. With water, the fruit comes out, the wood briefly dials back, but each drop has the same futile effect as a bullet fired at the liquid metal Terminator in Part 2 - it punches a hole, but that hole just gets quickly filled with more unstoppable Bourbon flavor. This whiskey is perfect for rocks drinkers.  In fact, it will probably destroy most ice cubes in a matter of seconds. I'm a little afraid of it, to tell you the truth.  There were only 132 bottles available out of this cask because the whiskey just kept sucking up wood and evaporating like crazy.  It has only one goal - total Bourbon domination.

-David Driscoll


The Best Four Roses Ever?

Don't you just love open-ended questions like that, which maybe hint at quality, but don't have the guts to make the assertion themselves?  I used to live by a diner in San Francisco that had a sign in the window reading, "Is our diner the best breakfast in town?" I don't know, is it? I live by a sushi place in San Mateo that does the same thing: "Is our lunch special the best value in town?" You tell me!!!! Regarding my question concerning whether the new Limited Edition Small Batch is the best incarnation of the whiskey yet, I would answer: that's what master distiller Jim Rutledge told me, at least.  Those were his exact words.  "I think this might be the best small batch we've ever made."  He also said that the 17 year old Four Roses casks that went into it "might be some of the best Bourbon he's ever tasted." Having now tasted the Four Roses 2012 Limited Edition Small Batch for myself, I can see what he's talking about. 

I had a friend schlep me a bottle of the 17 year old single barrel back from the Four Roses gift shop and I think it's very good whiskey. The 2012 Small Batch, however, is more impressive to me.  Maybe I'm being unconsciously influenced by the opinion of a master distiller, but I can completely see why Jim thinks those older barrels were better used as part of this incredible marriage. Even at 55.7% cask strength, the whiskey doesn't need much water, if any. 55% is about as high as I like to go with whiskey anymore, so I'm happy they didn't pull a Stagg or Parker's on me.  Inside the Small Batch are unspecified proportions of three Four Roses recipes at four different ages: OBSV 17, OBSV 11, OBSK 12, and OESK 12 respectively. The 17 year old juice adds more richness and body than the standard Small Batch has. The extra wood thickens the mouthfeel and intensifies the fruit along with the vanilla. It's a Bourbon with few flaws, if any, and it tastes impressive on the first sip. You don't have to sit there and ponder it.  It's obviously pretty freakin' great. If you had someone new to Bourbon taste both the Small Batch and the 2012 Limited Small Batch side by side, that person would most certainly say, "Ohhhh, I can see why that one costs more," when referring to the 2012 LE.

When we got these bottles into stock yesterday morning, I bought one without tasting it. I knew that if Jim was adamant about its quality, that would be enough for me.  We seem to have similar palates in so far as what we both look for in our Bourbon, so I was almost certain I was going to like this.  Is it the best Four Roses I've ever had?  In recent memory, there's no question: yes.  It's not a single barrel, remember, it's a carefully-crafted cuvée (how's that for alliteration?). It's polished, rounded, and mouthwatering, rather than bold, spicy, and powerful like some of the K&L single barrel selections have been (which I'll actually be writing about later today). Your expectations will ultimately play a role in how much you enjoy this whiskey, but I can't imagine anyone who loves Bourbon not loving this. Whether it's the best Four Roses ever or not is a difficult question to answer, however.  I'm not qualified to make that statement.  I would ask Jim Rutledge, the guy who has been making the whiskey for decades.  Oh, that's right, he already said it was the best.

I guess it must be. I've still got sixteen left. 

-David Driscoll


Binders Full of Women

UPDATE: 10:21 PM - What I thought was a very funny moment in tonight's presidential debate that perhaps only I noticed, was actually very funny to millions of people who have been tweeting, Facebooking, and blogging about this non-stop.  Now I am just another blogger trying to come up with another clever play on "binders full of women," which as a result makes me very unclever. Boo hoo. :(

"Binders full of women" = the new "Snakes on a plane"

I have now deleted the satire because I had no desire to ever make this political, rather just talk about how the sentence "binders full of women" made me laugh out loud. This now-viral catch phrase is going to get political now, however, so I'm getting out.  It was very funny, though. 

-David Driscoll