The Burnout Antidote (Part IV)
Why spend a whole week talking about whisk(e)y burnout?
First off, because I can sense it in the air. There's a glitch in the Matrix. A disturbance in the force. We're selling more whisk(e)y than ever, so it's got nothing to do with sales. People aren't buying less whisky, but I do feel like they're enjoying it less. I also get the feeling that many devout drinkers are getting less overall satisfaction from what it is they're spending. I had lunch with my friend Brian the other day who is in real estate and he confirmed the same pattern in the Bay Area housing market. Everyone thought the bubble was going to burst, but it bounced right back and now there's no inventory. You can still buy a house. As long as you've got a million dollars. Oh, and you'll need to pay in cash. Up front.
Let's say you've got a million in cash, up front. Is that what you want to spend it on? My friend Brian is reporting the same type of burnout with some of his clients. They're tired of waking up every morning, going to open houses, getting their hopes up with an offer, only to find out they've been outbid by someone else. Another friend of mine is in the same situation. He's been trying to buy a place for the last year and he's finally given up. All of the promotion about low interest rates, loans coming easier, and a strong market got him all excited. Then, when he went out to actually get a place, he found there weren't any places to get. There were plenty of places he wanted to buy, but the prices kept going up, up, up. When you finally close on a deal you might find you've overspent and that doesn't make for a satisfied consumer.
When we walked into some of our favorite Scottish warehouses last month, we could feel that something was wrong. Again, there was just that feeling in the air. It was confirmed when we looked at the price sheets after tasting through samples. $140 a bottle for 14 year old Laphroaig? $60 a bottle for a 6 year old Caol Ila? We purposely tasted through less-mature whisky, thinking some of these younger malts might offer value, much like someone going after a condo instead of a house. But then you're hit with the HOA fees and other hidden costs that take away from any possible savings, so you really didn't save much in the end. That's part of the reason that last year's casks were mostly in the $100+ range. It was simply worth spending the extra money to get something better.
What did we do differently this year as a result? We really put in the research. We found guys who sell casks, but don't bottle. We found ex-distillery employees who kept a few casks after retirement, but now want to part with them. We dug up every barrel we could find, no matter what the name, provenance, or age and we tasted them. All of them. Close to 250 casks in all. Many of these brokers are not as connected as brands like Signatory or Gordon & MacPhail. They don't have the customer base or the reputation for quality, so they're not charging the same premium. We found young peated whiskies. We found fifteen year old casks from places like Fettercairn or Blair Athol. We tasted blended whiskies as well. If we could find value we could possibly help relieve our market from sticker shock and further whisky burnout.
I can't imagine buying a house with a mortgage that took up every dollar I earned each month. Not being able to go out, living off of tuna fish, just so I could own my own place. It's not worth it to me and I know I would burnout fast with that type of lifestyle. Similarly, I don't want K&L customers to look at quality whisky as something they have to scrimp and save for. Maybe for a bottle of Port Ellen, but certainly not for a bottle of Laphroaig 14. There are plenty of value-priced whiskies on the market still, but die-hard whisky customers want new things. What's next? What's new? "I want something that I can't just get anywhere else," is the number one request in the K&L liquor department. I get asked for something new and unique fifty times a day. These guys have had Clynelish 14, Aberlour 12, and Highland Park a jillion times. They're beyond those bottles now. After nurturing a passion for single casks over the last couple of years, it seems like such a shame to call $100 the new $50 for this type of product.
What can we do about it as retailers? Work harder. Find deals. Do your job. I think we've done it this year. Royal Lochnagar. Bowmore. Fettercairn. Aberlour. Longmorn. Blended whiskies. Blended malts. Whatever we could find that had a great taste and a great price. That's the antidote for whisky burnout. Value. Finding a new, exciting, interesting whisky that you can afford to drink and still have money left over. Many of the K&L bottles this season will be geared towards consumption. You won't have to dollup out a thimble-full here and there. If things go as planned (fingers crossed) we could have as many as fifteen single barrel, high-proof whiskies that should sell for far less than $100. Less than $70 in many cases. Maybe even less than $60. I don't know yet because we haven't done all the math.
I'm hoping that this stimulus package puts a jolt back into the industry. We can't win by purchasing Diageo whisky and selling it for cost anymore (although that was fun, wasn't it?). I'm hoping that fun, drinkable, and affordable whiskies can make drinking single malt whisky something we do every night, rather than only for special occasions.