State of the whiskey business: It’s complicated

Nov. 2, 2022

This paid piece is sponsored by JJ’s Wine, Spirits & Cigars.

A few decades ago, it was wine. Or single-malt scotch.

Ten or 15 years ago, it was cult beers like Surly Darkness and Bourbon County Stout.

And for the past 10 or 12 years, bourbon has been the hard-to-get beverage of choice that’s drawing big interest and creating a secondary market for its most sought-after offerings.

“Everybody wants what they can’t have. That’s the nature of industry,” said Tom Slattery, owner of JJ’s Wine, Spirits & Cigars. “And the biggest issue with bourbon and American-made whiskey is that it takes time to make. To get a good, quality product, it must age at least four years. And when you try to speed that up, you likely set yourself up for disappointment.”

It all adds up to a whiskey industry Slattery calls complicated.

“It’s complicated in product availability, procurement and demand because everybody wants products that are hard to get, and because there’s such a small number of products, people have zoned in on them,” he said. “We just don’t get enough of some of those products to fill demand. So we engage in single-barrel programs and help develop new products and try to find those diamonds in the rough that people haven’t discovered yet.”

We sat down with Slattery to learn more about the evolving bourbon business and how you can source your beverage of choice – or find a new favorite.

 

So what is it about bourbon and American-made whiskey that has been such a draw? Why are these so in demand?

I think it is a little bit of a classic supply-and-demand issue. You can’t just turn around and flip a switch to increase production. The products that people are seeking age anywhere from six to 15 years. That’s a process that you can’t speed up, much like you could with the current rage that isn’t whiskey — vodka-based “ready-to-drink” beverages. They have to sit in a barrel for a length of time – legally – to make sure you get a solid product. Otherwise they’re not very good. And there’s a huge pop culture component. There are products people are seeking that might be regional distribution only or only available through the distillery, and they still come in seeking them even though they don’t realize it’s not available nationally.

The popularity of bourbon-based blogs, podcasts and TikTok videos hasn’t helped. People seek things that they hear about and use words that they are taught — words like “allocated” or “in the back.” Five years ago, nobody was asking us what we had for “allocated” items.

JJ’s has held Whiskey Wednesday events for several years now. How has that been received?

It’s a really good time and has built a loyal following, with new guests discovering it all the time. We use feature flights to help expose people to new things, and we offer those harder-to-get items through our weekly bottle raffles.

So you get to taste some whiskies and other spirits you might not have tried before, and we use the allocated items as an additional draw. That makes it fair, plus helps build brand awareness for products we think you’ll enjoy.

There seem to be a lot of new whiskies, including single barrels from craft distilleries known as finished whiskey. What do you think about them?

Honestly, we say no to these offerings more than yes. We’re seeing some products being pushed into the market too quickly for the sake of filling a void. The major players are harder to get, so we see some craft distilleries put out barrels that aren’t quite mature. So they put them in what’s called a finish barrel to give it some character or depth or change the flavor profile. When you look at the price – and it can be $70 to $100 a bottle – it gives people the impression that it’s worth that. In many cases, it’s smoke and mirrors. Others call it a different way of crafting a product, but generally if you do a blind taste test, you’ll find you prefer a classic bourbon that’s not as pricey and that is more readily available.

Are the major players doing anything to try to address this shortage?

For sure. Jim Beam recently went through a major distillery expansion. Buffalo Trace has been going through a $2 billion expansion for the last five years, and they haven’t quite finished yet, but they’re about to virtually double production capacity.

And all the while they’ve been increasing their barrel storage. They’re building 55,000-barrel warehouses, one every three months, so that’s the length these distilleries are going to to expand as needed, but it still takes time. 

Do you have to spend $70-plus to get a decent bottle of bourbon?

Absolutely not. There are plenty of options. We have seen it elevate from $15 to $30 to more like $25 to $40, but there are a ton of tried-and-true options out there. Some of the best bourbons on the planet are products still made the same way they’ve been making them for decades.

If you’re looking for something to drink that’s high quality, I always recommend people continue to support the brands that have been around forever or find a newer distillery doing it the right way that is establishing its production processes in the traditional methods.

Have you found some newcomers to the market that you like?

New Riff is one of my favorite distillers to pick barrels from now because they only do bottled-in-bond, which means they follow a long list of laws related to blending, aging, flavoring, bottling and seasonality.

And there are a lot of products out there trying to create a buzz. Colorado, for instance, was recently approved to classify a whiskey they make as Colorado malt whiskey – that’s an actual designation. Much like Tennessee pushed for their own designation — even though their process is identical to bourbon in every way except a charcoal filtering process — and there’s an effort to designate a blended American-Irish whiskey by O’Shaughnessy Distilling, which sells the Keeper’s Heart brand in the Twin Cities. A lot of this is about trying to create the next big thing, but in my opinion it’s all about what’s in the bottle. If you’re not creating a product people are actually interested in drinking – and drinking more than once – you’re not going to have long-term success and longevity in the market.

Do you have any current or upcoming single-barrel offerings that you are excited about?

We get excited about all our single barrels when they hit the floor, so much that we usually have a team toast to celebrate the newest arrival! Last weekend, we had a huge party to celebrate our newest barrel of Blanton’s Single Barrel – Fifth Edition “3 T-Slats & a Carrie.” It was a great time, and everybody loves that bourbon.

We also have current single-barrel whiskey offerings from Three Chords and Woodford Reserve. Side note: We don’t have a lot on the floor because we usually sell out quite quickly, plus we are very selective on what we choose. We also have single-barrel tequila offerings from Codigo 1530, both reposado and anejo expressions, and a single-barrel rum called Runabout that is a collaboration project with our friends at Glacial Lakes Distilling in Watertown and downtown Sioux Falls.

The Woodford Reserve we have available is pretty cool. It is a blend of two single barrels that we created with assistant master distiller Elizabeth McCaul, who is slated to take over for Chris Morris when he retires.

Coming up we have barrels from Knob Creek — this will be our 19th barrel of Knob Creek in eight years — Maker’s Mark, Old Elk and Smooth Ambler.

Whiskey Wednesday at JJ’s

Whiskey Wednesday offers mainly whiskey flight options but sometimes will change it up with other spirits. This Wednesday, Nov. 2, will feature a mezcal flight along with the weekly raffle. You must be in the bar by 5:45 p.m. every Wednesday. Purchase the feature flight or a food item off the menu, and you can earn extra chances at the raffle. Plus, every Wednesday, earn a 30 percent discount off the list price of any spirit in the store not currently on sale.

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State of the whiskey business: It’s complicated

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