Distillers struggle to quench thirst for whiskey
A global whiskey renaissance is straining supplies of some types of spirits, so some aged bourbons could become scarce in Pennsylvania stores, state Liquor Control Board officials said.
Sales of bourbon and Tennessee whiskey increased 86 percent during the past decade, according to the Distilled Spirits Council of the United States. And for the first time, American whiskey exports exceeded $1 billion last year, up from $400 million in 2002.
Industry experts say the growth is driven by:
• The popularity of locally made craft liquors, with a new generation of whiskey drinkers becoming interested in pricier, high-end products.
• The easing of export tariffs, which has boosted international sales but made less whiskey available to American consumers.
• The popularity of television shows such as “Mad Men,” on which alcohol is consumed freely and frequently.
• A resurgence in classic cocktails, such as Manhattans and whiskey sours, with whiskey as the primary ingredient.
LCB officials are analyzing sales of some scarce, aged bourbons to ensure that stores with healthy sales of those spirits are given adequate supplies, spokeswoman Stacy Kriedeman said.
“We are trying to make sure consumers that buy the products have access to them,” she said.
Brands in short supply include Buffalo Trace bourbon, Eagle Rare Single Barrel bourbon, Weller Reserve bourbon, Elmer T Lee Single Barrel bourbon and Blanton's bourbon, Kriedeman said.
She said that when demand is outpacing supply, a distillery often will raise its prices, stop putting items on sale or offering coupons and limit distribution so every place gets a few bottles.
“All of those tactics are being used in this case,” Kriedeman said.
Three brands will increase in price starting on Aug. 1. The price of Buffalo Trace bourbon will increase $1 to $24.99 per 750-milliliter bottle; Eagle Rare Single Barrel bourbon will increase $2 to $28.99 a bottle; and Blanton's bourbon will jump $4 per bottle to $57.99, according to the LCB.
Overall bourbon sales were up 2.5 percent this year through May, with double-digit growth in top-of-the-line products that sell for $36 or more and those at the next level that sell for $25 to $36, said Chandler Carranza, who recently left his post as the LCB's spirits category manager.
No easy solution
For distillers, meeting increasing demand is not as easy as simply producing more whiskey.
There are specific rules about the length of time some types of whiskeys must be aged and the types of barrels used to age them. For instance, a minimum of four years is needed to properly age some bourbons, so it's impossible to just ramp up production to meet a surge in demand.
In February 2013, Maker's Mark announced that it would stretch its dwindling bourbon supply by adding water, a move that would decrease the alcohol content but provide about 6 percent more volume, the company said. Because of outcry from customers, the company reversed its decision within a week.
The distiller now is looking at other methods to increase production.
“We currently have supplies ... to support consistent healthy growth for Jim Beam, Maker's Mark and our Small Batch Collection, though as we've said before, demand may run ahead of supply for brands like Maker's Mark from time to time,” said Chris Bauder, general manager for whiskies at Beam Suntory, which makes bourbon and whiskey brands such as Knob Creek, Suntory, Red Stag and Old Crow.
“To meet demand well into the future, we've been investing substantially over the past several years to increase our bourbon-making capacity,” Bauder said.
In some cases, craft or artisan spirits that are produced locally are filling gaps left when the big producers can't keep up with demand, Carranza said.
That's a best-case scenario for craft distilleries such as Wigle Whiskey in the Strip District, said co-owner Meredith Grelli.
“Those (large, national) companies were a bit too conservative in their production of rye whiskey, so now there's not enough of it to go around,” Grelli said.
Predicting how much to produce and how much to age is a tricky calculation.
Grelli said Wigle barrels and ages about 80 percent of what it produces. The other 20 percent is made up of unaged whiskey, gin and a rum-like spirit, she said.
“The whiskey business is a very strange business in that you make a very expensive product that you have to sit on for years and years,” Grelli said. Capacity limitations, plus the “huge financial risk to over-producing and to storing all this whiskey for so long,” factor into decisions, she said.
“The hope is that you get it just right where you can meet the demand that you have and you're not upsetting your distributors and all of those relationships you've worked so hard to create who rely on you for a supply,” Grelli said.
Some industry experts urge caution when talking about the whiskey shortage.
There's no need to panic, said Frank Coleman, a senior vice president with the Distilled Spirits Council of the United States, although he did say there is some “tightness in the top end of the market in smaller, high-end brands.”
But generally speaking, “no one needs to race down to their local liquor store,” he said. “There's plenty of supply to support a healthy growth in demand.”
Kari Andren is a staff writer for Trib Total Media. She can be reached at 724-850-2856 or firstname.lastname@example.org.
Add Kari Andren to your Google+ circles.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- Teen could spend 10 years in prison for role in injuring Ohio teacher
- Boy youngest to receive double-hand transplant in Philadelphia
- Medical pot has advocate in Pennsylvania House
- Probe continues in fatal shooting in Sharon hospital parking lot
- Mercer man accused of rape
- Fight for equal access continues 25 years after ADA signed
- Wolf critic: Public being misled on projected use of shale tax money