The Next BIG Spirits Boom

The noted leadership guru, Stephen Covey, once wrote you should always “begin with the end in mine.” With that said, we don’t have the answer as to what the next big spirits boom will be. However, it is a question that we’ve been able to answer distillers, marketers, PR people, etc. in the whiskey industry and the comments far exceed the 280 characters for which Twitter allows us to add context. So, here we go…

Last summer, I had the opportunity to attend the breakfast release party for Heaven Hill’s Parker’s Heritage orange curaçao-finished bourbon. As luck would have it, Denny Potter (at the time) master distiller of Heaven Hill sat two seats away from me and we were able to chat throughout breakfast. At one point as the table conversation lagged, I asked Denny this billion dollar question. Denny immediately answered, “gin.” When I asked him to expand on this curious answer. I was expecting rum, or tequila, or mescal, anything but gin. After all, gin is the choice of college kids looking to elevate their drink order in a gin and tonic, not the sippable spirit that whiskey or rum or tequila is. Denny was adamant the answer was gin. He pointed to the increasing interest in gin in parts of Europe, most notably in the UK. He pointed to many distillers being able to produce high quality gins quickly and infuse interesting and novel flavor profiles that extend far beyond the basic juniper that one associates with most shelf bottles of gin. Locally, New Riff Distillery in Covington, KY is doing some great things with their Kentucky Wild Gin. I own two bottles of their different gin expressions and love that the grains were sourced locally and the citrus notes are far different that the standard Tanqueray, Beefeater, etc. gins obtainable from the local liquor store. Our fellow founder of BourbonScript introduced me to Nikka gin about a year ago and that one too has earned a permanent spot in my bar with beautiful and prominent citrus notes. Both are sippable neat the mark, to me, of a quality spirit. However, when Denny was asked if Heaven Hill was planning a top shelf gin to take advantage of this coming boom, he simply answered, “no.” He pointed out that Heaven Hill brands has bottom shelf gins but not plans to enter into the craft space. However, as others have widely noted, gin and vodka drive profits of new distilleries as these clear spirits can be produced and brought to market quickly. No advance planning or extended aging is required.

As one surveys the spirits landscape, it has become apparent that distillers who produce tequila, mescal and rum have also elevated their products to the level of premium products who can compete in this landscape. I’m enamored with Four Square’s bourbon-barrel finished rums (including 2004, 2005, Criterion, etc.). The more I explore the world of rum, I find that many of these are not the Bacardi mixer quality rums that college students go through by the liter mixed with Coke but rather top notch products that stand on their own with increasingly complex tasting notes that sip like the best allocated bourbons. Frequently, I find myself standing in front of my home bar and choosing a neat pour of rum because of the subtle sweetness, the tamer and more pedestrian proofs and the molasses flavors that present so readily! Rum is truly a wonderful counterpoint for the bourbon lover!

Our fellow founder of BourbonScript resides in Arizona and happens to have a tremendous amount of expertise in agave spirits. In addition to introducing me to Nikka gin, he also turned me on to mescal. I’m always shocked when I order a mescal drink in a bar and I’m asked, “are you sure you want that?” or “do you like mescal” as if I’ve ordered a taboo drink that should only be ordered by the bravest of drinkers. When I share that I occasionally crave the dark smokiness of a mescal or the saltiness of pechuga or top shelf tequila not sullied in a margarita, bartenders are frequently surprised that I know my agave spirits. Tequila bars have been around for decades and tequila has not yet achieved the stardom of bourbon and world whiskies. What is holding them back? Who knows!

Industry insiders we have interviewed over the past 2-3 years believe the whiskey boom will end though they struggle to predict when. A distiller interviewed in a MUCH earlier blog entry indicated that their distillery was ramping up production anticipating at least 10-20 years worth of increased interest. Others have told us the boom may end within the next 5 years as production begins to catch up with demand for some allocated products as their planning 5-10 years ago begins to pay off with significant supplies of 10-20 year bourbons aging in their warehouses. We’re often reminded in Kentucky that there are more barrels of bourbon aging here than residents of the state. How big a deal will Weller 12 be once Buffalo Trace has thousands of barrels of 12 year bourbon in their warehouses? While the demand for the top allocated products the distilleries hype the most probably will not subside as they selectively control for supply, many of the second tier or even tier 1A brands will catch up…this per many top distillers! As supply equals or tops demand, the proverbial teeter-totter will shift and prices will likely decrease leading ultimately to reductions in production and hype-followers chasing the next big thing.

What we know (and believe) is that the whiskey boom is still here to stay for the time being. Drink up! Enjoy! Slainte!

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s