Saturation

We're witnessing a very unique moment in the spirits business; at least here in the boutique, niche section of that industry. Someone told me today that roughly 5,000 new microdistilleries were expected to come to market in 2016 according to a study they had read. I believe it. Over the past three months I've received multiple emails, daily, requesting an appointment to taste me on a new gin, vodka, local whisky, or distilled spirit of some sort. It's at the point where I don't even know what to do. As a retailer you can't buy everything you like, or even love. There's a point where the market reaches saturation and too much is too much. Let's put it this way, I've been given thirty new gins to taste over the past month. THIRTY! Even if I liked five of them who has room in their bar for five new gins, let alone thirty? I don't. I still want to play around with the five new gins I brought in last month. The scary thing is: there might be another thirty waiting for me in June. Who—and I mean this literally not rhetorically—is going to buy all this booze? 

Now table this thought for a second. Let me share with you the other side of this equation. The only email requests that outnumbered the appointment queries have been from customers looking for bottles we don't have. And I don't just mean some random liqueur from Northern Italy that they had on vacation last summer or a flavored vodka that they tasted at a friend's house. I mean incredibly rare and allocated things like Eagle Rare 17, Yamazaki 18, and forthcoming American whiskies that I will likely receive less than a case of in total. Even fairly large retailers like K&L receive teeny-tiny portions of these coveted whisky pies. I might get three bottles of Pappy 20 this year. Maybe two bottles of the 23. In non-Pappy terms, however, I might get twelve bottles of the upcoming Booker's rye whiskey; maybe a few more than that, but not much. What should I then do about the 900+ emails in my inbox asking me about if and when we might receive the Booker's rye? Whether it's the right move or not, I can tell you what I'm going to do. I'm going to write an apologetic response, explain the current state of the market, tell them there's nothing I can do to help them, and then rubber stamp that thing as many times as necessary until every email has been answered.

So, like I said, we're witnessing an interesting moment in the spirits industry. The boutique production is expanding like crazy because demand is supposedly up. Booze is hot!! Everyone's talking about it! Except that no one wants anything that they can get. If it's on the shelf and available 365 days a year, then it's not desirable. Spirits at this point have become fashion. They are identical in the metropolitan sections of this country. People want to stand out, be different, make a splash, and have something unique. I talked to a female friend the other day about her jewelry, having admired her necklace. "I love wearing this necklace because I always get so many compliments," she told me over a drink. That sounds like today's whiskey consumer. "I like drinking this whiskey because when I bring it to a party I get so many compliments," I can imagine someone saying. Dusty hunting is like antiquing. Driving from liquor store to liquor store is no different from running between Nordstrom and Bloomingdale's. What does this whiskey say about you? That you're an individual? Someone with taste? I'd say it definitely compliments your eyes and brings out your cheek bones.

Not that I'm complaining, mind you. I'm just observing. I think it's hilarious that I receive hundreds of emails each month from producers to taste spirits the public doesn't seem to want. Yet simultaneously I'm answering nonstop emails from excited potential booze consumers about spirits that we don't have. Does that not seem funny to you? I've got a huge store full of great booze and the only thing people want to talk to me about is what I DON'T have. HA!!!!!! HAHAHAHAHAH!!!!! (imagine an insane person laughing hysterically, that's me right now). You need to look at the fine print. Yes, spirits sales are up, but they're not up across the board and the market as I'm experiencing it is definitely not capable of handling an expansion of 5,000 microdistilleries, each of which is offering a vodka, gin, and young craft whiskey. We can barely sell the cream of the crop! It's not like Westland, Cut Spike, and Copper & Kings are flying off the shelves. We're cultivating them. They're coming along. People are slowly being introduced to them and their reputations are spreading. But there isn't room for another 5,000 of them in today's market. There's barely room for three.  

I spoke at corporate leadership events over the past year for LVMH, Pernod-Ricard, Beam-Suntory, and Diageo respectively. Each company team asked me the same question: what's next, David? Is it tequila or mezcal? Maybe it's rum? Or even a vodka resurgence? You know what I told them? Work; that's what's next. Work, work, work, work, work, channelling my inner Rhianna. WORK. That's what's coming. Motherfucking work. Here's an example of what I mean: let's say Beam-Suntory sold 500,000 bottles of Yamazaki 12 last year, but this year they only have 100,000 available. That means they're now going to have to work five times as hard because they're going to have to allocate those bottles fairly and strategically (just like I have to do with my rare whiskey allocations) and yet they're only going to make 20% of what they made previously. Does that make sense? There's less whisky available which actually makes it harder to sell from a producer/retailer perspective, yet you're doing more work for less pay! Hooray!

Here's another example: in 2008, I had Pappy Van Winkle on the shelf all the time. As much of it as I wanted. Just sitting there. Yet now I only get a few bottles a year and I have to put in ten times as much work to fairly sell and allocate a mere fraction of what I used to move. We hold a raffle with our best customers and doing so requires hours and hours of extra work to make exactly the same amount of money we would make if we simply put them on the shelf and let them fly. I don't have to do that, of course. I choose to. I believe in fairness. I don't believe in jacking up our prices or simply selling to the highest bidder. I believe in sorting through emails, answering one's correspondence, explaining how things work and what's happening in the market, and making sure every customer knows we're listening to them even if we can't give them what they want. That takes time and energy, which equate to work. That's what's next, booze industry: more hard work. That's OK though. I'm willing to do the work and, believe me, there's a lot of fucking work ahead. There's a lot of explaining that needs to get done and there's more whiskey than ever that needs to be allocated fairly. 

But I've got plenty of gas in the tank. I live for this shit. I'm actually very excited about this development because while I might not know everything about whiskey or have the world's most cultivated palate, I can outwork anyone. Bring it on, baby.

-David Driscoll