by bourbonv » Sat Apr 01, 2006 9:53 pm
The distillers may be saying that there is an increase of the angel's share, and I have no doubt that it is true to some extent, but the real thing that is causing a shortage is a lack of a good crystal ball 6 to 8 years ago. The whiskey industry has to predict sales 6 to 8 years in advance so they know what to make now. They did not make enough to meet demand.
There are a variety of reasons for this lack of production.
1) The distillers were not confident in the growth of the market. Yes 6 to 8 years ago the bourbon market was growing, but only in the high end products. Now that has had a trickle down effect and bourbon sales across the board are larger than they predicted. This is good for the industry but may be bad for the consumer as demand causes a rise in prices.
2) In the last decade we have had three distillery warehouse fires that deplete stocks for Heaven Hill, Jim Beam and Wild Turkey. These products were a small percentage of overall production, but the loss did not help the present situation.
3) Six to eight years ago there was a glut of whiskey on the market as United Distillers was selling their product since they no longer needed it after selling almost all of their brands. This created an artificial market that allowed people such as Old Rip Van Winkle, Jefferson Reserve, Noah's Mill, Old Pogue, Bulliet and even McKendrick and other brands to hit the market at a reasonable price and to fill their demand. That whiskey is no longer available and unless they make a deal with a distillery to start making whiskey for them, many of these brands will simply disappear.
4) There are some new markets opening up and a lot of the "shortage" is due to this expanding market. China and India alone are enough to create this shortage. This is all on top of the traditional overseas bourbon markets like Japan and Germany (I have wondered how much the unification of Germany has increased that market in the last twenty years).
All in all, I think the increase of outage is probably the least important factor in the shortage, but it is the one the distillers will want to focus on because that one is something that is completely out of their hands. Yes, the old growth trees are gone for the most part and the wood is not quite as hard, but I think that is not really the problem. Schenley started planting oak forest in the late 40's and early 50's so they would have wood for barrels. Those trees were probably harvested in the 70's or 80's and used for barrels. I don't recall anyone complaining about wood quality in that time period. Warmer winters is also a relevent thing. If the winter averages about 30 degrees before and is 40 degrees now, then the whiskey is still sleeping in the wood.
I think there is a whiskey shortage, but I think it is more due to business decisions than natural causes.
Mike Veach
Mike Veach
"Our people live almost exclusively on whiskey" - E H Taylor, Jr. 25 April 1873