Oh No, Prices Are Going Up! Hurray!
Straight Neck Stills & Littlemill Roots: Five Things You Didn’t Know About Loch Lomond
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Given the 2009 price of $1,500 for the last reserves of A.H. Hirsch 16 year old (in a similarly lush package), and the current madness for Van Winkle bourbon, it’s not even an unreasonable price. But then, the list prices for Van Winkle bourbons have always been relatively reasonable, which leads us to the next point.
Second: A handful of stores have already advertised this whiskey for sale, at an asking price of around $15,000, an 833% increase over the list price.
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My reaction on seeing this amazing announcement was cynically swift and simple: ‘And they’ll get it,’ I thought.
It’s not just Van Winkle, though that’s completely seized the minds of money-laden whiskey noobs. It’s the idea of whiskey as an “investment.” There are bottles that never even touch their buyer’s hands; they just sit at the auction house, appreciating in value. A year later, new auction, cha-ching!
The attraction is compelling. I just read today that someone bought a full set of the Glenfarclas Family Casks when they first came out ten years ago, paying £6,500. Today that set is being quoted at £100,000, a nice round number. That’s a compound annual growth rate of 31.42%. (Wish I’d bought five sets back then, but I’d probably just have empty bottles now.)
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But here’s the thing on that. Van Winkle 20 year old went for about $90 in 2007, so just for argument’s sake, let’s double that for an approximate price on the 25 year old – which would have been stratospheric for a bourbon in 2007. From $180 to $15,000 in ten years is a CAGR of 55.63%. Now…realistically, are you going to see that kind of return on a $15,000 “investment?” That’s buying near the top.
Well, I think it is. But then there’s this.
But that’s not all of it. Every time a bourbon like this 25 year old unicorn comes out, with a gasp-worthy price tag – and sells for that price or higher – there’s an inexorable tug upward on every tier of the category. I watched it happen over the past 20 years in Scotch whisky, and now it’s happening in bourbon.
I was in Kentucky two weeks ago, and prices are higher, and some old value favorites are simply gone; presumably because the distillers realized that they could make much more money by putting those barrels into the higher-priced blending. I was still able to find good bourbon for well under $20 a bottle, but the choices were much more narrow. The golden age of bourbon bargains is finally disappearing.
Every time one of these monster bottles sells (and yeah, every time one of you guys goes out and buys every single bottle of Booker’s in the store – or the area! – because you heard the price was going up), that’s more gas into the balloon of prices. And there’s nothing to do about it.
That’s because if you don’t buy it, someone else will. That’s where we are. We’re not in our little group of in-the-know people anymore. Everyone knows now, and everyone wants it. Get used to this, because Scotch drinkers did about five years ago. If you like Canadian, you’ve got about five years left.
But here’s the beautiful thing! Whiskey was a stone cold bargain in the 1990s, sure, but it was because the companies were barely staying open. They were running on inertia, on a glide path to obsolescence. We could have that…or we could pay what the stuff’s worth, and think about the fantastic breadth of choices coming as new places open – New Riff, Castle & Key, Lux Row, Bulleit, O.Z. Tyler, Angel’s Envy, Michter’s, Willett, and that’s only some of the big ones – and the old ones expand and experiment.
Yeah, folks. This may not be the golden age anymore, but it’s definitely silver. Let’s enjoy it, and show the new chums how it works. Be generous, and be joyful. We’re drinking whiskey; how bad can it be?
