The Basics of Give and Take: A 2016 Kentucky Primer
When I was in Austin a couple weeks back I met and drank with a bartender originally from San Francisco—born and raised in the heart of the city. He decided to move to Texas after becoming frustrated with the ever-growing pretense of the city’s food and beverage scene. We bonded briefly over our shared observations of the Bay Area’s flux and recent transformation, and before I finished my drink he said to me:
“Ever since I was a kid I watched new groups of people move to San Francisco and change the landscape of the city. They came and went, but they always added something to the culture. This recent movement, however, seems to be a lot more focused on taking rather than giving. It’s sucking the life out of the city without replenishing it in return.”
I’ve been pondering that comment ever since. I thought about it again this past Friday while eavesdropping on a conversation between a customer and a colleague. A guy came in looking for trophy Bourbon bottles and was dismayed by the prospect of settling for anything less than George T. Stagg or Pappy. My co-worker suggested our single barrel selection of Russell’s Reserve. “Wild Turkey?” the guy responded with cynicism; “I’ve never had anything from Wild Turkey that didn’t make me want to puke.” He left in a huff. I just laughed and sighed. The Bourbon category seems to be a particularly frustrating one for high-end consumers these days as the availability of high-end expressions is scarcer than ever. When a customer comes in looking for a fancy bottle of Bourbon to splurge on, we don’t have much to offer—and if you ask me, that’s a good thing. The Bourbon industry, much like the aforementioned bartender opined about San Francisco, has been sucked dry over the past decade by folks looking to take what they can, hoard the inventory of mature stock, while giving little support to the general category in return. What do I mean by that exactly? I mean that opportunism and glory has replaced practical growth and appreciation as it pertains to American whiskey.
Bourbon buying, much like with Bay Area property these days, is incredibly speculative. It’s become much more of an economy than a community. How many people buying rare bottles of American whiskey right now are actually drinking them? Likewise, how many people who have bought homes or condos in San Francisco actually live in them? In both cases, you’re looking at categories that have been overrun by investors with little interest in participation. A true fan of Bourbon enjoys the history and the culture as much as the caché; from Beam to Brown-Forman and beyond. Much like I enjoy the diversity of San Francisco and its many restaurants—from the greasy spoons to the fine dining institutions—I enjoy the entire spectrum of American whiskey. As long as there’s a bottle of something around, I’ll drink it and enjoy it. Contrast that with today’s modern consumer and you’ll see a large gulf between our desires and intentions.
But, like I said, it’s great to see frustration from within those ranks because a market full of nothing but basic Bourbon is good for real fans of the genre. Just like I have zero interest in making a new Pappy customer these days, I can promise you that Buffalo Trace isn’t interested in reaching a new generation of Weller or Elmer T. Lee consumers. No company needs new customers for goods it can barely furnish as is; especially when many of those same customers have little interest in anything other than those few coveted items. If you only buy the annual Four Roses limited releases and never the Yellow Label or Small Batch, you’re not really the ideal Four Roses customer. If you only buy the Brown-Forman Birthday Bourbon and never the Old Forester, I think it’s safe to say you won’t be on Brown-Forman’s list of VIPs. If an angry trophy hunter storms out of K&L when he’s forced to settle for a mere single barrel of the Russell family’s finest, that’s one less guy sucking the lifeblood from Bourbon’s livelihood while giving little in return. The fewer trophies there are available, the more likely the big game hunters will try their luck elsewhere, leaving more delicious tidbits for the true aficionados and loyalists.
Don’t think the Bourbon industry isn’t hip to this strategy.
I can’t prove it, and I have no evidence other than my own observations over the last few years, but I’m pretty sure that most of the major distilleries are choosing to allocate most of their rare and collectable bottles to bars and restaurants, rather than retailers. Why would they do that? Because fewer direct-to-consumer sales prevents secondary market flipping and it almost guarantees that the bottle will be opened, served, and enjoyed. I’ve watched my own allocations dwindle down to practically nothing over the last few years, yet I see more Pappy bottles than ever on back bars while dining out—and I’m not talking about fancy places either; I'm talking about basic San Mateo steakhouses and burger joints. I think it’s great, personally. I’m all for it, especially if it means pissing off hoarders and getting the actual liquid into the glass. It’s not like we were getting thirty cases a year of Sazerac 18. We were getting a bottle here and a bottle there whenever Sazerac could spare one. There’s no profit in selling rare American whiskey anymore because there’s no volume, so why should retailers care anyway? From a purely economic view, we’d rather sell fifty cases of Buffalo Trace. More money, less hassle.
The Bourbon industry has always supported those who helped to support it in return. Give and take is the foundation of any happy and successful community. It’s also how rare whiskey allocations work, actually; the more you sell of a company’s general whiskey expression, the more rare whiskey you get when supplies are eventually released. You scratch my back, I scratch yours. Be a loyal customer and when the time comes we'll make sure you're taken care of. Yet, I’m coming into contact with more and more people who expect the world and offer little in return. “David—can I get a bottle of Pappy this year?” Who are you? Do you shop with us regularly? Do you even have an account at K&L? Do you buy anything from us other than Pliny the Elder, Opus One, and the occasional rare bottle of whiskey? That’s how I personally determine my allocations these days. I don’t simply look for the customers who spend the most; I look for customers who appear to be interested in being a part of the K&L community—folks who want to participate and add something to our business. I would probably quit the retail world entirely if I lost the interaction with real drinkers. It would take all the fun right out of it. That’s exactly why the bartender I met left San Francisco: because it wasn’t fun anymore. There’s nothing cool, unique, interesting, or fun about an entire culture of people continually lusting after the “best”, which is why Bourbon needs this little high end drought in my opinion. Without the top shelf trophies clogging all the bandwidth we can finally get back to helping customers buy a regular old bottle of Maker’s Mark or Basil Hayden. I’m currently on a plane from Dallas to Louisville. David OG is with me. We’re getting ready to land in about twenty minutes. We’re going to pick up our rental car, hit the road, and search out some basic, everyday barrels of Bourbon. If that sounds exciting to you, fantastic.
If that sounds boring to you, even better!