Castle Brands Board (ROX)

[someconcerns]

New WSJ article on Bourbon shortage in general.

Fear of a Bourbon Shortage Puts Enthusiasts Over a Barrel
/The Wall Street Journal
By
Tripp Mickle
December 8, 2014

SIMPSONVILLE, S.C.—On a recent Saturday, Edward Johnson hurried into Harvard’s Liquor & Wine and made a beeline toward a 4-foot-wide section of bourbon. There he bypassed the Old Crow and Jim Beam and reached up to grab one of four stubby bottles of Blanton’s, a rye bourbon. At the register, the cashier had a 10-year-old bottle of Henry McKenna Single Barrel waiting for him. It was set aside that morning.

Mr. Johnson shelled out $107 for the bourbon and then headed to a nearby Sam’s Club, where he spent about $100 on diapers for his 19-month-old daughter. People observing this routine might wonder if he has a drinking problem. He doesn’t. What he has is a serious case of anxiety.

It began two years ago, when Mr. Johnson and his brother-in-law heard of an alleged bourbon shortage. He has been making monthly liquor and diaper runs ever since.

“It scared us and fear is a motivating factor,” said Mr. Johnson, a 36-year-old managing partner of Old Colony Furniture, who now has a stash of about 50 bottles of bourbon. The collection, he says, grew out of an urge to make sure there would never be a time “I wanted bourbon and couldn’t get it.” After a while, he says, the habit “took on a life of its own.”

He isn’t alone. Panic has gripped bourbon enthusiasts across the country, and they are amassing stockpiles of it, hoping to guard against shortages and price hikes.

Greg Gilbert of Lovettsville, Va., built a basement bunker for his 700 bottles of bourbon. He also joined a private club so he could bypass retailers and buy barrels straight from distillers. Joe Conner, a warehouse worker from Rockford, Ill., created a spreadsheet for his 120 bottles of bourbon so he could keep track of what he had bought, what he had opened and what he needed to purchase.
Related Video
Hoping to protect themselves from shortages and rising prices, bourbon hoarders are stocking up. WSJ's Tripp Mickle and Simon Constable discuss. Photo: Getty

Steffen Braüner, a surveyor from Denmark, travels to Las Vegas for a whiskey-tasting event so he can embark on an annual bourbon hunt.

Last year, he drove from Las Vegas to Utah, hoping that in a state filled with teetotalers he would be able to find a bottle of the extremely limited George T. Stagg. “There’s much less of what’s good to buy,” says Mr. Braüner, who returned to Denmark empty-handed.

Bourbon’s popularity has surged ever since the amber liquor became a star of Mad Men. Magazines such as GQ and Bon Appétit have devoted pages to articles on bourbon cocktails. The Manhattan and Old Fashioned have become fashionable again. President Barack Obama recently proposed a “Bourbon Summit” with Kentucky Senator Mitch McConnell.

“Whiskey has gone away from being seen as an old man drink,” says Mahesh Patel, a structural engineer who owns 4,000 bottles of whiskey and sponsors an annual tasting conference in Las Vegas.

Sales of bourbon are growing at a dizzying rate. Domestic sales of Kentucky-made bourbon have increased 36% in the last five years to $1.5 billion. Exports rose 56% to $300 million from 2010, according to the Distilled Spirits Council of the U.S.

All this makes bourbon aficionados practically see double. Prices of their favorite brands are rising. Within a few months, Mr. Johnson says he saw the price of a bottle of his favorite Blanton’s go from $45 to $60.

Rationing is increasing. Buffalo Trace Distillery, in Frankfort, Ky., has hired an allocation manager to make sure its bourbon is distributed evenly nationwide. Willett Distillery, in Bardstown, Ky., this year began rationing the amount of whiskey it sent wholesalers for the first time since prohibition ended in 1933.

Anxiety has intensified since Japan-based Suntory paid $13.5 billion in January for Beam Inc., the maker of Jim Beam, Knob Creek and Maker’s Mark bourbons. A main reason for the acquisition was to export whiskey—and a taste for American-made bourbon.

Bourbon made today can’t be sold tomorrow. It typically ages a minimum of four years in oak barrels charred by fire. The more it ages, the richer its flavor. Also, it evaporates over time. One of the oldest bourbons on the market, Pappy Van Winkle 23 Year Old, begins as a 53-gallon barrel but yields just 14 gallons. A bottle sells for about $250.

It isn’t bourbons like Jim Beam and Evan Williams —the kind often served at parties and tailgates—that are in short supply. Those are produced in much larger quantities, but people are increasingly buying bourbons that are produced in smaller batches, the Distilled Spirits Council says. That is why bottles of Elmer T. Lee, which its producer says smells of clover and old leather, and John E. Fitzgerald Larceny, which its maker says tastes of buttery caramel and honey, are tough to find.

Some suspect distillers are fueling the frenzy—only to capitalize on it. Reid Bechtle, a retiree with more than 500 bottles of bourbon, became suspicious in 2010 when Heaven Hill discontinued its Elijah Craig 18-Year-Old Single Barrel bourbon priced at $39 but later released 21- and 23-year-old versions of Elijah Craig priced at $120 and $200, respectively. Mr. Bechtle wondered if Heaven Hill intentionally pulled its 18-year bourbon off the market to age it three to five years longer so it could command a higher price.

A Heaven Hill spokesman said it had a supply problem that year and felt the bourbon was underpriced. The company plans to reissue Elijah Craig 18-Year-Old next year but will charge more than $39 a bottle.

Bourbon makers manage supplies closely. They have been burned by having too much whiskey in the past, says Buffalo Trace CEO Mark Brown. During the 1970s, the industry ramped up production only to have demand crash. Bourbon makers then put it on the market at lower prices. It took decades to recover.

“A whiskey maker’s worst nightmare is having too much,” Mr. Brown says.

It is this kind of thing that compels Mr. Gilbert to keep stockpiling. His basement is filled with bourbons that have spiked in price or are no longer available. W.L. Weller Centennial: “Disappeared.” Old Charter 12-Year: “Gone.” Eagle Rare Ten, 101 Proof: “Discontinued,” he says.

His wife, Kelly, says she sometimes wanders downstairs, surveys the ever-growing tower of bourbon, and thinks: “If he sold that, think of all the shopping I could do.”

Write to Tripp Mickle at [e-mail]

Corrections & Amplifications

Blanton’s is a rye bourbon. An earlier version of this article incorrectly described it as a wheat bourbon.

http://www.wsj.com/articles/fear-of-a-bourbon-shortage-puts-enthusiasts-over-a-barrel-1418004595?mod=djem10point

BTW, OT: I have a 1917-bottled bottle of Old Charter sitting and waiting.