Whisky, historically, experiences boom-and-bust cycles much like the larger economy. When times are good and people are drinking a lot of whisky, distilleries are opened or refurbished, production is ramped up, and lots of whisky is put into barrels. Usually, the 20-ish-year cycle follows this period of fat with a similar period of lean during which whisky drinking goes out of fashion, distilleries close or decrease production, and surplus barrels are sold at bargain prices to keep the lights on. (Traditionally, it is the function of independent bottlers to ease the impact of these cycles by buying excess barrels in the bust years and bottling and selling them in the boom years, a sound investment strategy).
Another side-effect of the boom periods is that whisky prices soar, often accompanied by frenzied inflation in the value of ‘rare’ and collectible bottles. Right now, like it or not, we are experiencing a boom. Distilleries are opening or ramping up production, prices are ratcheting higher, and limited-edition bottles are making headlines with record prices at auction. Many distilleries are riding the boom by releasing special bottlings and limited-editions at inflated prices because they know there’s consumer demand for them.
Just in the last 12 months, I have noticed prices at Costco, Trader Joe’s, and my local K&L Wines & Spirits sliding upwards. Glenlivet 12 used to be $21. It’s now $24. Glenfiddich 18 was $44 at Costco a few months ago. Now it’s $49. Balvenie DoubleWood 12 was $33 at Trader Joe’s for awhile. Now it’s $37. Even Finlaggan Old Reserve snuck up from $17 to $19 when I wasn’t looking.
It’s not just the bottom-end, either. Ardbeg Alligator is absurdly overpriced despite its 11-year age because – why? Because it’s limited. Oh, and they used some new oak barrels. Pssh. So does Jack Daniel’s. Glenfiddich Cask of Dreams is 14 years old and is asking $99. Oh, and it uses new wood too. See David Driscoll’s thoughts on the matter here and here.
Don’t get me wrong – nobody is forcing anybody to buy these higher-priced drams, and many of them are quite good. David says Cask of Dreams is very tasty, and Alligator was nothing to be sniffed at, either. Maybe they’re even worth the price-tag considering their quality. I’m just pointing out that prices are on an upward slope, as are money-grabs like Alligator, the new single pot still Irish whiskies from Midleton, and Buffalo Trace getting consumers to pay for its research & development.
So what’s to be done? I enjoy drinking $50 whisky. I feel guilty drinking $99 whisky. To help make sane decisions when picking out bottles, here are some criteria that I use when judging a whisky’s value (to me):
I’ll pay $30 for a value malt or a decent blend or high-quality bourbon that doesn’t taste like paint thinner. If I can drink it straight without cringing, I’m sold.
I’ll pay $50 for a distillery standard expression between the ages of 10 and 16, especially if I know I like the distillery’s house character. I’ll even consider paying this for a truly excellent blend or well-respected bourbon.
I’ll pay $85 for a special bottling or limited-edition expression if it has something intriguing about it, like a Sauternes finish, fino sherry aging, a really good story, or which is a really spectacular single-barrel or vintage. Same goes for an independent-bottling of one of my favorite distilleries which shows a different side to the product (like an unusual cask finish or age statement).
I’ll pay $99 – $120 (sometimes) for something at or older than 18 years of age, but only if I know in advance that I like it.
I think the key to saving money is knowing what you like, and what’s worth the splurge. Knowing that Springbank really pushes your buttons makes dropping $99 on a fino-finished Springbank a more palatable proposition. Knowing that you’ll never see another Calvados cask finish makes dropping $85 on an Alchemist bottling of Highland Park worthwhile. Knowing which of the many blends provides a relaxing, satisfying sip can help you space out the expensive drams with cheaper ones. If nothing else, remember that this, too, shall pass and we’ll all be in a whisky bust as soon as something else becomes popular with young people in Japan. When açaí eau-de-vie becomes all the rage in the Argentina nightclub scene, it will be time to start thinking about buying up some of those excess casks of Glendronach!