American Whiskey Faces Supply and Demand Issues

“The whiskey category is growing and growing; we’re loving it,” says Elizabeth Gregg, general manager of Applejack Wine & Spirits. For the Denver area retailer, American whiskey is the fastest growing section of the store.

Most retailers around the country would echo similar sentiments. But many find the rise in American whiskey can present challenges for retailers, including tight allocation and higher prices.

“Overall there is plenty of whiskey available, but some of the bourbons people really want have become almost impossible to keep in stock,” says William Moore, chain general manager at Crown Liquors, who oversees all 29 retail stores in the Indianapolis area.

Even some products that previously were readily available are now in tight supply, the GM notes, citing some of the Weller products, Buffalo Trace and Willett. Now, these are often sold with one-bottle-per-customer limits. Says Moore, “But there are new bourbons coming out every day, so overall there are more SKUs on the market then there have ever been.”

“We’re having difficulty keeping the Sazarec family of whiskies on the shelf,” says Scott Clark, owner of Sodie’s Wine & Spirits in Fort Smith, Arkansas. Buffalo Trace, Eagle Rare, Blanton’s and Weller don’t even get stocked on the shelf when an allotment is received. “We have a lengthy call list of good customers we contact to sell those items,” he adds.

“At this point it is impossible for the supply to keep up with the demand,” says Andrew McMurray, vice president of Zachys Wine & Liquor in Scarsdale, NY. “Nearly every month another whiskey becomes allocated. Beyond the limitations of the Antique Collection and the Pappy line, we have very limited access to Booker’s, Blanton’s, Weller, E.H. Taylor and even Buffalo Trace now.”

Prices Climb Higher

At Applejack, Gregg is having similar problems sourcing enough of some whiskey brands to satisfy customers. “And prices are going up, as much as $10-$15 a bottle, so we have to raise our prices.” When customers ask about increases, staff tell them it’s a supply-and-demand issue. “But they are willing to pay the price for bottles they want,” she points out.

“As demand increases and production levels stay the same, price increases are a certainty,” says McMurray at Zachys. “While some items have increased by so little the consumer can barely tell, others have gone up by 33% or more, which is frustrating for the loyal consumer of those brands but has yet to affect demand or sales.”

One way producers are getting around dwindling stocks of aged liquid and meeting increased demand is by blending variously aged stocks and removing age statements. Do customers notice or care? Retailers are split on the question.

“Customers are looking beyond age statements now. There’s no push-back,” Gregg notes. “A few years ago, it was more about age. Now customers are fine with blended.”

“Customers do still care about age statements,” Clark says. “At Sodie’s, our customers are spending a lot of time looking at labels, asking questions and looking up brands on their phones.”

“Age statements are impressive, but the most important thing to consumers has always been the quality in the bottle,” McMurray believes.

“Customers certainly do care about age statements. But for every customer who is miffed at Elijah Craig 12-year-old being changed to Small Batch, there are two new customers for Elijah Craig products who weren’t familiar with 12-year and don’t mind the change,” Moore explains.  “They care about getting a good product at a fair price.”

Who is the new customer walking down the whiskey aisle?

“Most of the newer customers are younger people, aged 21-25,” Moore says. Predominantly men, but more women are interested in whiskey lately. The GM observes that more beer customers are also shopping the whiskey aisle. “There is a natural progression from craft beer to whiskey.” Moore also sees crossover from other spirits categories. All the news about whiskey has gotten them curious to try something beyond their usual.

The demographic for American whiskey is definitely changing, agrees Gregg, who also observes more women shopping the whiskey aisle. “At Applejack, we are seeing that 30- to 40-year-old group grow. But while older customers are staying with Jack, Jim, and Evan Williams, younger customers are going for Basil Hayden, Stranahan’s and Four Roses.”

Overall, retailers are bullish about the longevity of the American whiskey boom.

“As long as producers keep supplying good quality product at a fair price, the trend will continue to be healthy,” Moore predicts.

“We don’t see the whiskey category slowing down,” Gregg says. “It’s just getting bigger and bigger, and we don’t see an end in sight.”

Thomas Henry Strenk is Brooklyn-based writer specializing in all things drinkable. Read his recent piece: Where Cordials and Liqueurs Show Growth in 2017.

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