American whiskey, led by the boom of Bourbon and Rye, with the enthusiastic assistance of hundreds of craft distillers across the country, is growing in popularity here and spreading around the world. The problem inherent in this sudden whiskey rush is the same Damoclean sword that all headlong rushes have hanging over them. Let’s frame it as two questions: Will it last? If it does, what direction will it go in?
These are crucial questions. As a wood-aged spirit of tremendous complexity, whiskey takes a long and expensive road to market. The acceptable minimum production cycle for a whiskey now is two years—and that is only at the most sophisticated of experienced distilleries. For craft distilleries, the learning curve alone may take several years before a whiskey is marketable. Quicker aging methods have been claimed, but those claims are currently listed alongside snake oil cures and miracle weight loss pills.
Making good whiskey takes time, money, talent, skill and experience.
It is no coincidence that craft distillers depend upon neutral spirits—vodka, gin, and other flavored spirits—to survive long enough to produce potable whiskey. Even then, there is incredible pressure to rush a whiskey to market before it is quite ready. It’s called ROI by the bean-counters.
The large corporate distilleries have perhaps a more daunting task. With the lead time whiskey requires, these distilleries have to predict—some would say gamble—on whether the boom will continue, level out, or even fall off in favor of some other alcohol category.
Whiskey is just as much a boom-and-bust business as anything else that depends upon a fickle public to survive. Just look at the history of Irish Whiskey (now booming, but that’s a recent thing), Scotch, and American Whiskey, all replete with surge-and-decline debacles. A corporation that guesses wrong may find itself without product to sell in an expanding market, or conversely, with a huge surplus of unsellable product in a declining market. Either way, shareholders will become militant and executive heads will roll—if the company is not staggered, driven into a takeover, or forced into bankruptcy.
Up until roughly the new millennium, American Whiskey was doing well but hardly booming. Big distillers were expending all their efforts on producing the most homogenous, pleasant, and middle-of-the-road styles they could. Their aging and blending protocols favored the mellow ‘sippin’ whiskey’ style for the bulk sales, with display window special offerings for dramatic effect to attract collectors, connoisseurs, and early-adapters who demanded something bigger, bolder, beyond the parameters.
True story: while visiting a major whiskey producer some years ago, I asked the master distiller if it were possible to taste from any of the single barrels in the warehouse. He became uncomfortable, hemmed and hawed, and finally said he would rather not do so. He later confessed that this particular whiskey brand’s stock-in-trade depended upon the iconic style replicated in every bottle—and that iconic style (the blend) was difficult to ascertain in a single barrel, because each barrel was unique. He preferred that people tasted the final blend as the expression of his whiskey, not individual barrels.
Fast forward, and my how times and attitudes have changed. Nowadays the large brands are leaping at every opportunity to embroider their brands with special bottlings, including a plethora of single barrels, cask strength, barrel finished (pumping up the vanilla oak), and even adulterating whiskey with added flavors and sugars, such as cinnamon, honey, maple, apple, etc., something rarely seen in the past and usually considered only for marginal whiskeys that needed masking flavors. (By the way, that aforementioned distillery now aggressively markets bespoke single barrels, cask strength single barrels and a couple of flavor-added whiskey liqueurs.)
So. Quo Vadis American Whiskey? Whither goest thou?
Taking a deep breath and armed only with the smattering of information I can gather from an open market, coupled with intuition honed by many years in the business, I will make the following predictions:
The Boom Will Continue
For the next several years American Whiskey will continue expanding, with larger sales in existing products and new products coming out constantly to feed the insatiable demand for “new and distinctive”.
Prices Will Go Up
It is inevitable; face it and move on. That’s the nature of our system. It’s how things work in an uber-capitalist society. Price points remain the single greatest suggestion of quality.
Blended Whiskey Will Decline Slightly
“Blended Whiskey”, as a sub-category not to be confused with ‘mingling’ whiskey for a brand, will at first surge, then decline. Blended Whiskey (that containing from 20% to 51% straight whiskey with lighter whiskeys or almost-neutral grain spirits added) was a creature of necessity in the first place, either to provide cheaper entry-level product or to maintain shelf space when Straight Whiskey was in short supply. With current attitudes prevailing, Blended Whiskey will surge briefly (High West BouRye), and will then recede, surviving but yielding pride of place to the straight whiskeys.
Straight Whiskey (Straight Bourbon and Straight Rye) Will Enjoy Huge Expansion
With an existing identity, reinforced by heritage, tradition and experience, these whiskeys will continue to dominate the market. The big brands will get bigger; brand extensions will explode; new brands will be created (some as marketing-created facades only; some as growing craft distilleries catching fire).
Special Designation and Post-Distillation Finished Whiskeys Will Grow
The production of nifty new designations to catch the imagination will be more powerful than ever; that is an irresistible siren-call for producers…not much effort for potentially huge profits. So more Single Barrels, more bespoke barrels, more cask strengths, more playing around—excuse me, experimenting—with new ways to add flavor to a product that was originally intended not to have flavor added.
American Malt Whisky Will Become a Major Category
It hasn’t happened yet, but American Whiskey will finally be hugely influenced by the Scottish-Celtic style built around malted-barley whisky. This is a momentous sea-change for American Whiskey, but at the same time seems inevitable. A relative handful of current American whiskeys use 100% malted barley, so they are outliers at this point. But make no mistake: the American malted whiskies are coming.
Age-Dated Whiskey Will Become More Rare and More Expensive
The major distilleries, paying attention to what happened with Single Malt Scotch and the headlong rush into pushing age as the predominant marketing factor in fine whisky, will attempt to both control and capitalize on age statements, raising prices and creating the specter (often false) of dwindling availability; at the same time they will be directing the marketing approach toward NAS (No Age Statement). Just as the Scotch distillers are scrambling to shift their marketing towards NAS whisky, and having a troublesome time of it with their most devoted fans, American producers will change their marketing away from age statements toward individual style expressions to differentiate their products. In short, you’ll see more NAS American Whiskey and higher-priced age-dated whiskey. Indeed, although you may not have noticed it, this has already been happening.
Bars Will Be Stocking More “Bespoke Barrel” Whiskeys
This is a new trend, and it will do nothing but increase. The major distillers have seen the profit opportunity, as well as the branding opportunity, of selling bespoke barrels (single barrels or private blends) to individual bars. The process has become so streamlined that, even in a controlled state such as Oregon, the top-ranked bars aren’t considered in fashion if they don’t have their own selected barrels. One such bar has a current total of 11 barrels, including Bourbon, Rye, Brandy and Tequila…with 3 more on the way. Bartenders see this as a powerful personal statement; smart suppliers see it as a gold mine.
It used to be that the only way you could get whiskey was for saloons and hotels to buy it by the barrel and then sell it to you. Some of those old fashioned ideas are returning with increased emphasis on barrel programs.
Those are the predictions. Remember the most important thing about predictions, though: they are, at best, informed guesses. They’re not worth anything until years later, and by that time they are usually forgotten.