Decadelong bourbon boom now an obsession
American whiskey was tied to the working class; now, even everyday bottles are pricey
In June, two men in Virginia were charged with an unusual form of insider trading: selling information about when and where rare bottles of whiskey were going to appear in state-run liquor stores.
To an outsider, their scheme may sound strange. To bourbon collectors, it is just another cautionary tale from today’s frenetic whiskey market — and one that some probably wish they had thought of first.
According to prosecutors, Edgar Garcia, an employee of Virginia’s alcohol control board, fed the confidential information to Robert Adams, a private collector, who sold the list to scores of people on Facebook for up to $400 each.
Virginia requires that hard liquor be sold at government-owned outlets, where it is priced significantly lower than in other states. To control the inevitable rush by bourbon lovers to snap up soughtafter bottles for less, the state keeps distribution details a secret, announcing the releases at random times via email and on the board’s Facebook page. Fans then stampede to the stores, and every minute counts.
“I was there within 20 minutes,” wrote one buyer on Facebook after a release in November, only to find the shelves already picked over. “At least 10 people in the store when I got there.”
The willingness of Garcia and Adams (who both pleaded guilty) to commit a felony just to sell information, and the apparent eagerness of others to buy it, is a measure of how much the decadelong bourbon boom has turned into a mania.
Bourbon and rye, the leading styles of American whiskey, have long been considered workaday drinks, sold at workingclass prices. As recently as the early 2010s, it was hard to find a bottle priced above $100, and most sold below $50. Even as the market for six-figure single-malt Scotches boomed, collectors largely shunned American whiskey, aside from a few standouts such as Pappy Van Winkle.
That has all changed. At an auction at Sotheby’s last spring, several bottles of Michter’s bourbon sold for more than $20,000 apiece. A new brand, the Macklowe, is selling its American single malt for $1,500. And a bottle of LeNell’s Red Hook Rye, an extremely rare whiskey bottled in the late 2000s by Brooklyn liquor-store owner LeNell Camacho Santa Ana, can go for more than $90,000.
The price leap is not just at the luxury level. Everyday bourbons such as Buffalo Trace or Eagle Rare, which once sold for about $35, now often go for twice that.
“Today, $75 is the new $35,” said Dixon Dedman, who created Kentucky
Owl, one of the first luxury American whiskeys not called Pappy. Dedman and his partners sold Kentucky Owl to Stolichnaya for an undisclosed sum in 2017, and he just introduced a new brand, 2XO, with a retail price starting at $95.
The craze drives collectors to extreme lengths. Like music fans eager to snag tickets to an upcoming show, some will camp overnight outside liquor stores, hoping to grab a limited release from cult distilleries such as Buffalo Trace and Four Roses.
It’s hard to pinpoint when the bourbon boom went into overdrive. The Distilled Spirits Council
of the United States, a trade group, says sales of all American whiskeys have grown at a steady pace over the past decade, from 16 million to 30 million 9-liter cases. For most of that time, the volume of sales was consistent across all price categories, from cheaper to so-called super-premium bottles costing more than $50.
Then, around 2016, sales of super-premium whiskey took off, while those of cheaper whiskey slowed. Over the next five years, sales of so-called value whiskey, priced under $20, rose just 4.2%, while sales of super-premium rose more than 129%.
Bourbon fans were becoming better educated, and with that education
came a willingness to pay more for higher quality and, even more important, exclusivity. In response, distilleries began to offer limited-release bottles with unusual qualities — drawn from a single barrel, for example, or bottled at high proof — which fueled interest.
Supply became an issue as well. Whiskey has to age, so production can’t simply ramp up to meet demand. The amount of whiskey on the shelf today is a function of decisions made five or more years ago.
The pandemic drove demand higher by combining unexpected free time, in the form of quarantines, with unexpected money, from a booming stock market and government
stimulus checks.
Social media then amplified the hype.
In the early 1980s,
Elmer Lee, an unassuming Kentuckian who worked as the distillery manager at what is now Buffalo Trace, told his bosses that American whiskey was every bit as nuanced and elegant as single-malt Scotch and, in the right packaging, could be sold at luxury prices. The owners, desperate for money, asked him to prove it.
He responded with Blanton’s, the first single-barrel bourbon. He had a bottle custom-made, complete with a metal-and-cork top, and in 1984, he released it at about $30. For decades, that’s roughly where it sat, creeping up with inflation
to about $60 in 2018.
Then, suddenly and for reasons no one can quite explain, Blanton’s went viral. Podcasters talked it up. Instagrammers hyped it. Customers lined up to buy bottles, even after store owners tripled or quadrupled the price. In New
York, it often sells for more than $300.
Lee died in 2013, so he never got to see his bourbon achieve its stratospheric valuation. Would he be proud of its success, or repelled by its luxury status, realizing too late that he had created a monster?
Both answers seem possible — which speaks volumes about the fractious state of American whiskey and its legions of fans.