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


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

We're half way through 2013 and it's been a frustrating year for a number of whisk(e)y drinkers, mainly because the availability of mature releases has become increasingly scarce, while prices for the usual suspects have gone up, up, up. We've written a number of posts about this subject over the last few years and I've received a healthy dose of customer rants. Many longtime drinkers simply feel like they're getting less and paying more, especially for new marketing and gimmickry. While I can't really argue against that mindset, nor do I necessarily disagree with it, I'm not going to "continually look in the rear-view mirror," as one of my emailers wrote. There's still a lot of good whisk(e)y to drink out there if you can get your mind out of 2009. You can't get Yamazaki 18 for $99.99 anymore, just like you can't get Chateau Lafite for under $500 or a house in the Bay Area for less than $500,000. We know that.

The question is: what can you get without overpaying? Plenty.

Young Whisky

Not all whiskies are created equally. Americans more than any other consumer, however, are still easily swayed by age statements, numbers, points, and ratings more so than their own judgement. Nothing confuses more K&L shoppers than the gulf in price point separating the Lagavulin 16 from the 12 year ($64.99 vs. $99.99). "This doesn't make any sense," they say. "Why is the 12 year thrity-five dollars more when it's four years younger?" Many reasons, as we all know, but mostly because the 12 year isn't simply the exact same whisky with four less years in the barrel. Yet, we continue to compare young whiskies versus their older brethren, cursing the rising cost of youth without perhaps stopping to think about whether the quality has risen with it.

For example, is ten year old Bruichladdich spirit, made entirely after the re-opening in 2001, of the same quality as the older, inherited whisky they first released? Not according to Jim McEwan.

"About five weeks ago I checked our present ten year old and twelve year old against what was available before we bought the distillery in 2001, which was a ten year old and a fifteen year old, and the difference was huge. The old stuff was lacking in almost all areas, particularly in the oak department. The whisky was lacking in oak influence and the fruits of distillation were very muted and there was no finish to speak of - it was gone after fifteen minutes," Jim told me yesterday via email. "Now the problem really came to light on my first few weeks here, when every cask was a second or third fill, even fourth fill and so I set about recasking every single barrel  in the warehouses into fresh Bourbon and fresh Sherry. That took three years due to the lack of cash, but I got it done and you know that I have only used the best available since I started at Bruichladdich."

It's no surprise that the initial Bruichladdich releases after the ressurection were finished in all kinds of different wine casks, hoping to add some pop to the dullness of old wood maturation. "Crap wood gives little or no
flavour from the cask,"
Jim added, "so instead of improving the spirit, the wood is like a parasite and it sucks the life from the spirit. Of course, (a little caramel) fixes that in terms of colour and sweetness, but that's like make-up on a ugly woman, the final nail in the coffin." This is something to keep in mind when you think back to 2007 and the $50 Bruichladdich 12 year that you once loved. Today's 10 year release is far superior, both in my mind and in Jim's. Not only because of the increased quality of Bruichladdich's maturation program, but also the flavor of the distillate itself.

Bruichladdich's Bare Barley release is one of the best of 2013No whisky has impressed me more so far in 2013 than Bruichladdich's Bere Barley release, a six year old release made from a different strain of barley (perhaps brought to Scotland by Norse invaders sometime around 800 A.D.) than their usual single malt whisky. Again, some customers scoffed at the $70 asking price for a malt so young, despite the fact that the quality was absolutely stunning. When something tastes this good and is made with such care, isn't it worth shelling out the extra money? "The Bere Barley is so young and pure, no make-up just as nature intended. Its history, honesty, and harmony honor the guys working on a dream which the consumer can experience, the wonder of how the seed survived since the 9th century, brought by Vikings to Scotland. What a living timeline!" Jim wrote in a separate email last February. When we think about whisky today as consumers we need to consider what steps distillers are taking to justify the new market pricing. Is your favorite whisky pushing the limits, working hard to bring you something new and exciting? In my mind, Bruichladdich is truly beginning to stand tall above the top its Scottish competitors, in terms of quality, value, and design. Their Botanist gin continues to be one of my favorite mixers and the Port Charlotte 10 year might be my favorite peated whisky of 2013 thus far.

Can six years really taste better than sixteen? We think so.Don't forget Kilchoman, either. Most single malt fans have learned that the farm distillery's penchant for smaller heart cuts and slow distillation times is resulting in some of the finest peated whisky in the business. Their newest release, 2013's sherry-matured Loch Gorm, is already testing the patience of many consumers with its $79.99 price tag, despite its six year age statement. Everything explodes, however, on the first sip - supple sherry, iodine and peat, rich barley, and campfire smoke. Just to make sure I wasn't overly-excited by my own personal bias, I decided to open it next to a bottle of the Lagavulin 16 - a whisky that has recently taken a qualitative nosedive, in my opinion. There was no question concerning which whisky was the more impressive specimen. The Lagavulin tasted muted, watered-down, just flat out boring when paired next to the provocative and poignant Kilchoman. The Redwood City staff came away confounded, but as McEwan already pointed out, the number doesn't tell you anything about the condition of the barrels.

-David Driscoll