Pricing Me Out Of the Market

David Driscoll (yeah, yeah, I get about 90% of my inspiration for these articles from things he discusses on his blog, so sue me) posted recently about the global drop in the quality (and value) of single-malt scotch that has occurred over the last few years (and is still occurring). His case-in-point, Lagavulin 16 which used to be a “better deal” than young Kilchoman, but is now inferior, thus making the pricey Kilchoman a lot more reasonable.

He also notes “I’d rather pay a little more for better quality, wouldn’t you?” which ordinarily I’d agree with. A large percentage of the opinions I post here on this blog are related to the value of whisky – finding better quality for a reasonable price. I’d far rather pay $45 for Great King Street: Artist’s Blend than anything comparable (and cheaper) from any of the major scotch blenders. On the other hand, I’d rather pay for Lagavulin 16 than the slightly better (and far rarer and more expensive) Lagavulin 12. My sweet spot for whisky falls between $40 and $75. If a malt is good and falls in that price range, I’m sold and willing to recommend it. If it falls in the $80 to $100 range, it better be excellent for me to recommend it, and I probably won’t buy it frequently. If it’s above $100 and isn’t the most sensational liquid to pass my lips, ever, then I’m not on board. That just happens to be where my budget and sensibilities lie on the spectrum. In contrast, there are plenty of people who would consider $40 for scotch a ludicrous waste of money, and plenty of other people who wouldn’t dream of wasting their hard-earned trust fund money on anything under $150. (I kid.)

The problem comes when the whisky market shifts upwards until my “sweet spot” covers relatively few choices. If Lagavulin 16 isn’t worth my money anymore due to a drop in quality (and, truly, who wants to spend more money on an incrementally worse product?) and concurrent increase in price, then I (apparently) have to turn to single-cask Kilchoman for $110. I love David D., I do, but I simply can’t swing that. I’m sure the stuff is excellent (as all Kilchoman that I’ve tried has been), but it can’t be $110 excellent, at least not for my wallet.

So where does that leave you and me, assuming you’re on board with me thus far? We have a few choices:

1. Other Booze. David has been pushing the alternative spirits lately – Mezcal and Tequila, Rum and Rhum Agricole, Cognac, Armagnac, and Calvados, among others. I’ve found a few gems but ultimately find myself either vaguely disappointed with the products I’ve tried, or wishing for the specific flavor profile of single-malt scotch. Perhaps it’s the curse of being a “scotch man”, but I find it a lot harder to find a bottle of those spirits that meets all my criteria for cabinet regular. Still, replacing scotch with a more cost-effective alternative spirit one or two nights a week is one way to reduce one’s dependency on foreign scotch. *cough* You know what I mean.

2. Find the remaining gems. I still have a few winners in my cabinet that both continue to satisfy and continue to be light on my wallet. Unfortunately, digging these out of the market is a lot of work; work that is continually undone as stocks dry up, formulations change, and prices creep ever upwards. Bank Note Blended Scotch is high on my list. Speyburn 10 is light, refreshing, and awesomely cheap, Redbreast 12 is still $45, Glenmorangie’s regular line-up still satisfies, and… er, well, that’s it for the moment.

3. Bourbon. As long as you aren’t chasing Pappy, BTAC, and are staying away from unproven craft distillates, there’s still plenty of value to be found in the American whiskey sector. For example, WL Weller 12 and Rittenhouse Rye 100 Proof when you can find them. Alas, the cat has long escaped the bag on this one, and demand is quickly outpacing supply.

4. Be Creative. Have a bottle of some overpriced pap that turned out to be watery and listless or simply not as good as last time? Try your hand at home blending! You might be surprised at how you can perk up a glass of disappointing slop with a few splashes of something else. You may even learn something! This works especially well with mediocre blends – up the malt quotient with something sherried, peated, or cask-strength and you might end up with a winner.

5. Cocktails. I’ve been playing around with cocktails lately, even though I’m not much of a bar-goer. I’ve mostly been trying to discover recipes that aren’t too sweet (I despise a sugary cocktail) and showcase the flavors of wood-aged spirits. While I haven’t found a “go-to” drink yet, I have managed to turn some $20 bottles of bourbon into Old Fashioneds, Manhattans, and Behind the Timeses (wow, pluralizing cocktail names is harder than I expected… Sexes on the Beach? What?) that I wouldn’t be ashamed to serve to friends.

6. Bunker. As much as I hate that word (and the smug attitude that usually goes with it), there’s a time-honored tradition among whisky aficionados of buying more bottles than you need when you discover a gem. This isn’t great advice now, however, as it would be like buying at the top of the stock market, but it does still apply to the remaining gems. Bank Note might be the first spirit that I purchase by the case, because the quality/value ratio of that blend can’t possibly last much longer.

7. …? Give me your ideas in the comments, below, because I’m out of steam.

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23 Comments

23 Responses to Pricing Me Out Of the Market

  1. Austin says:

    As much as I love scotch and other whiskeys I still drink pretty conservatively despite the number of bottles decorating my shelf. As a result, I rarely have much issue with splurging now and again on a new bottle, but I must admit the quality issues you mention are disheartening. Some of my staples have been replaced because of this.

    If you can find them or try them I’d recommend Balblair. Ive had both the 00 and 02 and find them both uniquely fantastic and seated firmly in your pricing sweet spot.

  2. Craig says:

    Try Deanston Virgin Oak if you get the chance. It’s $48 here in NS, Canada and is way underpriced (in my opinion).

  3. Jordan says:

    Which types of rhum agricole have you tried so far? I think it’s the closest thing to single malt in the rum world, but the grassy/vegetal flavors can be kind of off-putting at first.

    • I’ve only had a few Agricoles at tastings (I don’t remember the names). I buy very little rum of any kind (I end up buying so much whisky instead!) but I’ve enjoyed Mount Gay Black Barrel, and the Lost Spirits Navy Rum recently.

      • Jordan says:

        The two agricoles I’ve found most scotch-like have been Neisson Reserve Speciale and La Favorite Coeur de Rhum. They’re not cheap, but the liter bottles help to offset the price.

        If you like Lost Spirits’ rum, Smith & Cross should be on your list. It doesn’t have the wine finish, but it has a similar high ester punch that makes it one of my favorite rums.

        Sadly too many rums are overwhelmed by sweet molasses notes, which can make them somewhat unidimensional. Finding the drier varieties is tricky but worthwhile.

      • Alex says:

        As a scotch drinker, my favorite rums are the El Dorado 15yr and Mount Gay XO. They are about $40 in my area. In my experience, the El Dorado 15yr is quite complex and woody, with some milk chocolate notes, and the Mount Gay XO is like a cognac, with a complex creaminess and no cloying finish.

  4. Gene says:

    I very much agree. Looking at my shelf, and recent acquisitions, I’m also starting to top out my sweet spot of sub-$99.99, there’s simply not much good untried whiskey left that satisfies my criteria. Even K&L’s new arrivals are coming in predominantly at $109 price point. It feels like for the next few years it will be some combination of your points above. Kirkland 18 comes to mind of a gem that was dirt-cheap by not being associated with a major label, although I have a feeling it with be harder and harder to find those gems as demand (and shortage) peaks.

    • Michael says:

      Actually, that sort of thing might become more common. I was at a tasting recently for Duncan Taylor, an independent bottler like Alexander Murray who puts out the Kirkland Scotch, and they said it’s becoming common practice for the bigger distilleries to sell them whisky that 99% single malt, but then to mix in 1% of another malt.

      They do this so the independent bottlers no longer can call it single malt, can’t mention the distillery by name on the bottle and can no longer charge a premium because it’s a blend.

      So there may be a chance to find some value in the independent bottling space in the future.

  5. Gene says:

    8. Accept whiskey being a premium product and raise the mental price point for quality. Ie: high quality cognacs. That is, assuming the quality holds.

    Ps. You forgot about DoubleWood, about the only still-affordable Balvenie. Although I expect it to jump into $50-60 range any day now. Caribean Cask I’m expecting to rise into $70s as well as stocks are updated and pricing propagates.

    • Very good point, Gene! Yes, if your enjoyment of a whisky can be maintained despite paying more than you want to for it (or more than you think it’s worth), then the grin-and-bear-it strategy is a good one. This is an especially good tactic if the current whisky bubble turns out to be a true bubble (and not a New Normal). It’s also true that newcomers to the whisky scene are more likely to be willing to pay today’s prices with ease, just like I was happy with $50 whisky when people who have been in it since the 80s (or earlier) think that’s ludicrous. The Kirklands (18 and 20) are also a good choice, but I fear that subsequent releases of those types are only going to drop in quality, due to the very limited quantities of decent barrels left on the independent market. It takes a lot of juice to supply Costco, and that can’t last much longer.

      • Gene says:

        Agreed. As consumers, we are at market’s mercy on this. Its either ‘submit to the prices’ or ‘stop drinking’. As prices have been rising from the 80s (or earlier), they are unlikely to stop now with constantly increasing demand. Announce ‘something is limited’ and market will buy it out that much faster as consumers stock up. Which gives retailers and producers a reason to charge more next time around any stock becomes available. I can only shake my head when my friend tells me how he bought a case of Glenrothes ’79 in early 2000′s for $50 a bottle. Currently, its both just about impossible to locate or costs an arm and a leg. This is reality and it scares me.

  6. Ben L says:

    Look for sales and stock up. Binny’s in Illinois has 15% coupon couple times a year. I just added 16 bottles to my bar. Saved almost $200.

    • Jordan says:

      Astor Wines in NYC is pretty good for that as well. They also offer free shipping for first time orders over $99, so you can really clean up when they have a sale. Even after that, shipping across the country isn’t more than $4-5 a bottle, so not too bad.

  7. bryan f says:

    Whisky is bottom line a luxury item. We dont need it and as such i dont mind getting priced out of the market. I dont mind dropping $100 for a bottle every once in a while, but no way im loading up at these prices. I will be a little jealous reading future reviews though.

    • Yes! Too true. I, perhaps, have a skewed view as a whisky reviewer. I spend an inordinate amount of money on Scotch every year, and I would say that I generally drink single malts 7 or 8 out of 10 alcoholic drinks a week. That adds up, and causes me to wax poetic on this blog regarding the price increases in the market. For a consumer that spreads time equally among beer, wine, cocktails, and straight “sipping” spirits, a few $20 increases aren’t going to significantly dent the yearly alcohol expenditures. Perspective is key.

  8. Eric says:

    I have a different opinion on the issue of purchasing additional bottles (the Bunker Option) of a dram that I have become fond of. Scotch Whisky is unlike other products in that presentations (and quality) vary from production run to production run. We are also seeing (maybe “sensing” is a better word) a perceived reduction in quality. I would suggest that now is exactly the time to buy additional stocks of a favorite Whisky. In fact, if you like the current presentations and can afford them, I think it is wise to grab it now so you can continue to enjoy the version you have tried and verified meets your quality standards. The fact that costs are high should be irrelevant since a.) all indications are that costs will continue to climb, making waiting a more expensive proposition if you wish to replace consumed stock; and b.) if we are right about demand causing a reduction in quality, I for one will long for the ability to buy that bottle today that I passed on yesterday. All indications are that demand will continue to rise making the environment worse.

    I hope I am not sounding “smug” by supporting the idea of grabbing additional bottles of a tried and true dram. While prices are higher than they were in the recent past, I expect it to only get worse. The other thing I consider is the value I place in the “satisfaction” of the knowledge that I can enjoy what I have without worrying about how I will replace my favorite single malts of known quality. I also get more satisfaction in shareing what I have, knowing that I have plenty to share without concern of how to replace what we enjoy.

    • bryan f says:

      Eric, i apreciate your point of view but also i have to consider how many times i’ve bought more than one bottle only to find out later that my own tastes have changed. It turned out to be a mistake. Not to mention that there are so many choices today that i probably will not get to them all in this lifetime (just got a bottle of mccarthys SM). Although its nice to fall back on a favorite dram every now and again there is so much new spirit being cranked out that i have no problem accepting that something new and exciting is waiting for me if im willing to look around a little. This also leads me to my second point; that there is so much new spirit being produced between new distilleries and increased production at old distilleries that demand will eventually surpass supply. Consider that perhaps a change in the trendiness of whisky could kill demand instantly, or maybe some other unforeseen driver of demand reverses course unexpectantly and i wouldnt be surprised to see distilleries being mothballed again (really i just wanted to say mothballed really bad, it sounds socool). My last point is on fear, the fear of missing out is a huge driver for hoarding. I have no such fear (i have a lot of other fears though); if its not there anymore its not there, move on to the next or a new hobby. Thats the great thing about non-essential items. Im not going to dish out my hard earned money to provide extra profits for shareholders (I dont have a problem supporting a local company like springbank though). Id rather save it for a rainy day.

      • Eric says:

        Brian f,

        Thanks for your insight. I like your logic and I won’t argue against anything you said.

        In the end we are all different, have different tastes, different budgets and in fact get different enjoyment out of various aspects of our hobby. I personally get a great deal of enjoyment out of sharing my collection with others; having an ample supply of favorites makes that process easier for me personally , as I don’t “fear” the thought of running out of particular favorites.

        This site is another example of enjoyment of the hobby. I am interested in other opinions and learn a great deal from others, regardless of their experience levels.

        Great site…great commentators…great discussions.

  9. Eric G says:

    In my experience, French brandies offer a level of complexity and craftsmanship to appreciate that’s comparable to single malt scotch. The flavors are different, but they’re just as interesting. Even though I’m a scotch hobbyist, if I had to choose between scotch and calvados, I’d probably pick calvados.

  10. Jesper K says:

    Here in Denmark alcohol taxes was decreased some time ago. That has compensated for a part of the price increases we see now.

    Remember to think of the the supply side as well.

    The whisky boom causes existing producers to invest in new production capacity. New destilleries are being built. Not only in Scotland but around the World.

    The problem with whisky is that maturation seriously delay the effect from new capacity is established untill the supply effectively increases. For Scotch whisky at least 8-10 years for decent single malts.

    But for an Indian brand like Amrut, the maturation could be shorter. 6 years could match 10-12 years in Scotland due to warmer climate.

    The whisky boom have been going on for some years now. We could hope that some producers are able to put larger quantities on the market soon.

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