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Jimbaround

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5 hours ago, GreenspointTexas said:

https://www.wsj.com/business/americas-bourbon-boom-is-over-now-the-hangover-is-here-3e9961d7

 

“When Rob Masters listed 400 barrels of two-year-old bourbon for sale online at $900 apiece, he expected them to be gone within days.

Eight months later the barrels are still there. "We aren't even getting a sniff," said Masters, head distiller at The Family Jones distillery in Denver.

Just two years ago Masters could rake in $2,000 for similar barrels. "Back then two phone calls and I could have them gone," he said.

America's bourbon boom is over and businesses big and small are starting to hurt, with distillers cutting jobs and shelving expansion plans.

Liquor sales soared during the pandemic as Americans flush with cash splashed out on booze, making cocktails at home and drinking more frequently. Now drinkers are cutting back, plowing through bottles they accrued in recent years and trading down to cheaper brands.

The growing popularity of anti-obesity drugs, cannabis and low- and no-alcohol drinks is increasingly hurting sales, too. The U.S. Surgeon General recently said alcohol should carry cancer warning labels, a recommendation that if enacted could hurt sales for an industry already contending with a pullback in drinking by younger people.

Sales volumes of U.S. whiskey -- including bourbon, Tennessee and rye -- dropped 1.2% in 2023, marking the first fall since 2002, according to industry tracker IWSR. That drop steepened last year, with volumes down 4% in the first nine months of 2024.

Brown-Forman, which makes Jack Daniel's and Woodford Reserve, noticed the U.S. whiskey market deteriorating sharply a year ago. "To be honest, it's not really getting a lot better," Chief Executive Lawson Whiting said last month after the company reported a 3% fall in net U.S. sales for the six months to Oct. 31.

While big players aren't immune to the downturn, smaller distillers are being hit hardest because they lack the financial clout to ride out the turbulence. The American Craft Spirits Association said in August that the rate of craft distillery closures had accelerated from the year before.

Liquor makers of all stripes are contending with waning demand: In 2023, the volume of spirits sold in the U.S. declined for the first time in nearly three decades, IWSR said. However, makers of aged spirits have the added challenge of taking a punt on future demand by laying down barrels to age years in advance.

"It is bourbon -- there is no right here and now," said Tom Bard, co-founder of the Bard Distillery in Graham, Ky. "You're trying to forecast the market five, six, ten years down the road."

Tariffs threaten to pose additional challenges. A deal between the U.S. and the European Union that paused proposed 50% tariffs on imports of American whiskey into Europe -- a response to steel tariffs levied by the first Trump administration -- is set to expire at the end of March. President-elect Donald Trump has also said he plans to slap new tariffs on goods from Canada, Mexico and China, which could raise packaging costs and spur retaliatory tariffs.

Distillers fear that tariffs will hurt exports and that American whiskey that can't be sold abroad will find its way back home, adding to an existing glut.

"The one thing that has everyone here scared to death is tariffs," said Eric Gregory, president of the Kentucky Distillers' Association.

Bourbon started growing in popularity in the early 2000s after a long stint in the doldrums. Its comeback was helped by television shows like "Mad Men," which featured 1960s advertising executives sipping on bourbon through the day. By 2015 the industry was so hot that barrels were in short supply, bourbon enthusiasts were stockpiling and distillery workers routinely pulling 80-hour weeks went on strike complaining they were overworked.

Over the past decade production has kept climbing. Kentucky alone produced 3.2 million barrels of bourbon in 2023 and had a record 14.3 million barrels aging at the start of last year, according to the KDA.

While a decade ago bourbon makers couldn't keep up, now there is a consensus that they have overproduced.

"We're in a very serious correction right now which is perhaps overdue," said Ken Lewis, who owns Newport, Ky.-based New Riff Distilling. The Kentucky bourbon industry is making nearly three times as much as it is currently selling, Lewis estimates.

Some investors who jumped into bourbon to make a quick buck when times were good are now dumping stock, exacerbating the glut of barrels.

"The bourbon boom brought a tremendous amount of money into the industry and a lot of that was for the wrong reasons," said Lewis. "In some ways it's good riddance."

Alarm bells rang in the industry back in October when MGP Ingredients, a major contract distiller that makes booze for other brands, warned that some of its smaller customers were struggling to make good on their obligations to buy whiskey.

MGP said slower growth and higher inventories were leading to lower prices and that in response it was reducing production and putting less whiskey away to age. The company warned that it expects "even more pressure" on whiskey sales and profitability in 2025. It has since replaced its CEO.

In Colorado, The Family Jones began slowing its rye and bourbon production a year ago, ending its contract with an outside distillery that made some of its alcohol. It has since laid off a distiller and two salespeople from its 24-strong workforce.

Smaller distillers are also suffering as wholesalers run down the pandemic-era stockpiles they amassed to protect against supply disruptions. Brown-Forman said last month that distributors are buying less than usual and favoring the big brands that are more likely to sell.

Some distillers are shifting gears. Statesville, N.C.-based Southern Distilling has paused plans to open a new contract distillery to make whiskey. Instead it is doubling down on bottling and packaging services.

"We've been in a post-Covid hangover where everyone was home day-drinking and you had this hockey stick increase in consumption that was not normal," said CEO Pete Barger.

Not everyone is pulling back. Bardstown Bourbon, Kentucky's largest contract distillery, added a new still at the end of 2023 and recently expanded its sales force. The company sold out its contract capacity in 2024 and expects to do so again this year, said President Pete Marino.

"We've had to show up at more trade shows than we have ever in the past, " Marino said. "But every period of disruption provides opportunities. We're investing through the downturn."”

 

 

lololol

I would have led with the “3x distillate in production than is being sold” at New Riff instead of some unknown craft distiller not being to sell 2 year old barrels. 
 

New Riff sounds like a ticking bomb. I’m sure they’ll declare bankruptcy in a few years when they can’t sell their 4 year old bullshit. If Bardstown doesn’t buy their inventory, those barrels are going to sit for a long time. 
 

I think the glut is already here in mid tier stuff like McKenna 10 and Booker’s. Customers have not reacted well to the price increases. I think Blanton’s is next. There will still people collecting specific dump dates, but it’s not a $90 bottle. I haven’t looked, but the flippers’ margins have to be super thin on Blanton’s, and serious bourbon drinkers don’t really drink it. 

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This is gonna put some folks outta business and it ain’t gonna be the big boys. Hopeful for awesome smaller-mid sized folks like NULU, but people just aren’t spending money right now on discretionary items.

We’re seeing it in video games too and, while the last two years have been brutal, this could be the worst yet 🫠

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I like the Bourbon Trail Libby glass for the hotter/younger/cheaper bottles to help them breathe a little bit. Especially great on ryes that run hot. 

 https://shop.libbey.com/products/libbey-signature-kentucky-bourbon-trail-whiskey-glasses-set-of-4?srsltid=AfmBOop_frwovVt9sWt6b346aqLQzqH6n2R8m5Ma1oCxQoDIMbz80pdm
 

Glencairns are great, but nothing can hide in that glass 

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OLC 25th Still Austin pick and Still Austin Tanager.  I went on this pick at the distillery and it’s a pretty unique peppery note, but more of a poblano/green chili vibe than black pepper with lots of oak tannins.  Dry, but interesting and I do appreciate what Still Austin is doing relative to most Texas distilleries.  The Tanager has a better mouth feel and more caramel on the palate, but I’m not sure I love the finish.  

IMG_3220.jpeg

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On 1/13/2025 at 8:24 PM, billfromlaketravis said:

Thanks. If they get some good picks, please share.

I haven't been yet. My wife has gone a couple times, but she is a gin and tequila person. I'll check them out soon. 

 

I went to my other spot today and found these

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The price on the Woodford Reserve Madeira Cask Finish shocked me. I didn't know what it was, but it was hiding in the store picks stack, so I grabbed it. $200. Ouch.

The Calumet Farms Small Batch is 14Yr+ 8Yr. I'm about to see if it's $10 better than 1792 Small Batch.

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Lucky to find another one of these from a friend who let me have it at original retail of $100.
It’s one of the best Masters Collections in my opinion, but it’s a really polarizing one.
Lot of love and a lot of hate too.
I’m definitely in the love camp.
415b6c26fb26b67c0e76c12f2d601ffa.jpg

My feelings for that bottle are similar to Oat Grain: it’s an acquired taste, but very well crafted.
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On 1/18/2025 at 9:15 PM, Txslnghrns said:

14881e70564d68097bf1720741db5651.jpg

18 years. $120. Where’s the Irish whisky thread? Thanks in advance.

It doesn't see much activity, but maybe you can rev things up a bit over there.  I prefer the usual taste profiles of bourbon (e.g., vanilla, honey, caramel, cinnamon, etc.) over those of scotch or Irish whiskey, so my cabinet has far more bourbon than other types of whiskies.  But every so often I'll pull the cork on some Irish or scotch, esp. when the weather is colder.  A pour of Redbreast with a pint of Guinness is pretty damn fine.

 

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