So, About That Bourbon Shortage We Keep Hearing About...

So, About That Bourbon Shortage We Keep Hearing About…

By Maggie Kimberl / June 2, 2015

The bourbon shortage has been a hot topic in the whiskey world over the last couple of years.  Just about every other week there’s an article that declares, “there’s no bourbon shortage, relax!” or “start hoarding bourbon before it’s too late!”  With so much conflicting information out there, what’s a bourbon lover supposed to believe?

“In my opinion, this is not a bourbon shortage right now because we’re not drinking three month old whiskey because that’s all that’s on the market,” said Filson Bourbon Historian and author of Kentucky Bourbon Whiskey: An American Heritage, Michael Veach, on this topic.

The simple answer is this: there’s plenty of bourbon, but maybe not plenty of your favorite bourbon.  Or your favorite bourbon might be available, but the age statement may have been temporarily (or permanently) removed.

“Whiskey is a different type of industry,” said Veach. “You have to figure what your supply is going to be years in advance.  It’s not a product that you can just put out there.  If you’re running short on a brand you can’t just make more, it has to age 4-6-8-10 years.  There’s plenty of whiskey out there right now, but there is a shortage of certain brands because of the age”.

The bottom line is that there will always be bourbon on the shelf.

Buffalo Trace recently had some words to say about the bourbon shortage, and it sounded almost as though they were trying to reassure nervous customers, asserting, “the good news is that supplies of fully-aged whiskey at the 225-plus-year-old distillery continue to increase and Buffalo Trace is making more whiskey than ever,” but then adding, “the bad news is that demand continues to outstrip its available supply, which means all of the distillery’s whiskey brands remain on allocation.”

The translation here: you’re still going to have to wait in line for your Pappy Van Winkle and your George T. Stagg for the foreseeable future.

Bourbon shortage

How much of this bourbon really is in “shortage?” (image via Kentucky Distillers Association)

The Effects Of Prohibition

Still, this is not a true whiskey shortage.  “The only time there has ever really been a shortage was when Prohibition was repealed,” noted Veach as he pointed out that before Prohibition, bourbon was a four to eight year old product that was distilled at a fairly low proof and put in a barrel at a fairly low proof.

During Prohibition, bourbon was aged even longer, becoming even more full bodied and very woody.  “Some Prohibition brands taste like you’re chewing on a barrel stave,” said Veach. “When people wanted the good stuff during Prohibition, they were getting it smuggled from Canada or Scotland.  Both have lighter flavor than bourbon.”

Also, as Prohibition went on, the few distilleries that were allowed to remain in operation had strict limits on how much whiskey they could produce- a limit of 3 million gallons per year.  This limited supply even further.

“When Prohibition comes to an end,” said Veach, “the only bourbon you have is either really old and very woody or a small amount that is only four to five years old that six companies were allowed to make during Prohibition to replenish stocks.”

That is when there really was a shortage, with it really hurting competitiveness with Canadian and Scotch whiskeys and other spirits such as Caribbean rum.

A Shortage Among Non Distiller Producers

There is, however, a bourbon shortage among new Non-Distiller Producers, or NDPs.  At The Bourbon Classic in February, we heard master distillers from the largest Kentucky distilleries assert they have plenty of bourbon for their own needs, but they don’t have any extra to sell.

So, if you’re planning to start a new bourbon label and you won’t have any of your own product ready to bottle for a minimum of six years, you’re going to be hard-pressed to find any Straight Kentucky Bourbon Whiskey to bottle in the interim.

Wes Henderson, Angel’s Envy Master Brand Ambassador and son of Founder Lincoln Henderson, had this to say about the shortage: “What you heard at the Bourbon Classic is a pretty accurate analysis of what is now happening in the industry.  While I think there is some horse trading happening behind the scenes amongst the larger players, anyone new to the party will have a difficult, if not impossible, time getting aged bourbon.  We have the inventory necessary to meet our obligations and projections.”

Henderson further went on to say the biggest problems his company has are related to the explosive growth of the Angel’s Envy brand in the past few years, not necessarily the bourbon supply.

“It will be interesting to see how the bourbon market looks over the next few years from an inventory perspective,” he said.  “I expect demand to be even greater as overseas markets jump on the bandwagon.  The big question will be, with most distilleries producing at capacity, whether or not they have over-produced, or will still be stretching to meet additional demand.  If excess inventory becomes available, then you may see fewer scarcity plays and more products available on the market at varying price points.”

As bourbon’s popularity continues to grow, we will undoubtedly continue to hear alarm bells from distilleries about supply.  While you likely aren’t going to be able to pick up a bottle of Pappy Van Winkle on a whim any time in the next decade, there will always be plenty of excellent bourbon on the shelf any time you want it.  We’re not experiencing a true post-Prohibition era shortage, just a shortage of rare, extra-aged, and new-label brands.

In short, bourbon lovers have nothing to worry about.

About the author

Maggie Kimberl

One night during Derby week, I was working in the liquor store while Four Roses Master Distiller Jim Rutledge was doing a tasting. I kept trying to make my way over to talk to him, but we were super busy (did I mention it was Derby week?) and I didn't make it in time. Dejected, I went back to the break room and started eating my lunch. The next thing I knew, Rutledge came through the door, saying, "You didn't get to do my tasting!" He sat down and explained how to taste bourbon, the ten recipes of Four Roses, and how it was different than other distilleries. I had liked bourbon before that point, but Jim Rutledge made me care about it. That's the beautiful thing about the bourbon industry- the people love what they do, and their enthusiasm is infectious. Now here we are. :)