The Whiskey Economy

Whiskey EconomyJust as it happens with economy in general, whiskey consumption, too, passes through its regular boom-and-bust periods. When things are on the rise and people are going for whiskey, the whiskey trade swells up. Production of whiskey rises, whiskey barrels are filled up, new whiskey distilleries are opened and old ones get revamped. Generally, the whiskey trade experiences roughly 20-year cycles of fat and lean following each other. Similarly, when things slow up and whiskey moves out of fashion, the whiskey production faces a slump, whiskey distilleries see their profits dwindle and whiskey barrels are released at flat bargain prices to keep the business running. (This is the time for the independent whiskey bottlers to move in the fray and buffer the impact of the bust by buying off the excess production at bargain prices. A solid investment plan anyway, since they will now bottle and sell this stuff again when the things swell up.)

A predictable side-effect of the periods when things are at a rise is that the whiskey prices ratchet up in no time. Accordingly, the collectible, ‘rare’, and limited edition whiskey bottles experience a dizzying inflation in their value and the auction prices fetched make heads spin. The whiskey distilleries too join in the fray and release limited edition and special bottlings of their own. The prices for them are far from encouraging for the regular whiskey drinker, but those in the whiskey business know that the demand is on and they can really afford to push things. And for a matter of fact, we are passing through just such one whiskey boom period right now.

Prices at Trader Joe’s, Costco and K&L Wine & Spirits have soared up in the space of the last one year. Glenlivet 12 whiskey has moved up to $24 where it used to be $21. Glenfiddich 18 whiskey has moved from $44 to $49. Trader Joe’s was selling Balvenie DoubleWood whiskey at $33. Currently the bottle flaunts a price tag of $37. Finlaggan Old Reserve, too, has moved to $19 from its previous $17.

The higher ups in thare similarly soaring even ‘higherer.’ Ardbeg Alligator is 11 years old and the price they are asking is enough to make one swoon. And all because the product is ‘limited!’ And of course, they got some new oak barrels to house it, too. Jack Daniel’s is also moving the same way. Then there is Cask of Dreams (14-years) from Glenfiddich and it is simply absurdly priced at $99. So listen to what David Driscoll is saying about this.

According to David, Cask of Dreams whiskey has an excellent state and so has Alligator. Well, nobody is denying them that and at any rate, there is no force involved, so anybody who is not comfortable with the price can step away. My point is that the prices are at a soar and just so, the folks at Alligator, Buffalo Trace and Irish whiskey merchants like Midleton are making their consumers fork out the dough for their own internal research & development.

So what can we do under such circumstances? If I consider myself, I relish drinking a $50 whiskey bottle. But if it comes to a $99 whiskey bottle, I cannot but feel guilty. Following are my own set of criteria on determining the value of a whiskey:

$30 for a decent blend whiskey, value malt whiskey or good quality bourbon whiskey that passes your gullet all smooth is a well buy.

For a distillery standard expression whiskey of an age between 10 and 16, I am okay to pay $50. I would splurge the same amount for a really good bourbon whiskey or an excellent blend whiskey.

For limited edition whiskey or special bottling whiskey, I am ready to go up to $85 only if there is something about it that really intrigues me and tickles my imagination, such as a fino sherry aging or a Sauternes finish or the like.

At rare occasions, I may even pay anything in the range of $100- $120 if the whiskey product in question is 18 years or older and I know in advance that the whiskey will satisfy me.

The trick is to know what whiskey products are really worth your money. You can go for a $85 Springbank whiskey or $99 Highland Park whiskey since they can give you that extra for your bucks. You must know how to really mix the cheaper whiskey products with these occasional ‘rarities’. Or you can just stay put and wait for the next whiskey bust to hit the shores. It is going to, sooner or later, and as soon as some new staff catches the fertile imagination of the young Japanese or the big guzzlers of the Argentina night scene. And then it will be time to relieve Glendronach of some of their excess casks of whiskey!