Stuff To Freak Out About: Yes, There Really Is A Whiskey Shortage

whiskeybarrels

No, seriously. There is. Not some kind of manufactured, doing-it-for-the-clicks viral/social faux-shortage, but an actual, honest-to-John-Jameson real shortage of good whiskey. Outposts of serious journalism (like Smithsonian Magazine and Esquire) and no less a force than the PR department at Buffalo Trace have come forth and said, with no equivocation, that we, the brown-liquor-loving masses, are drinking whiskey faster than it can be produced and, as a result, a crippling shortage in whiskey is coming. Also, as of this moment, there is very little we can do about it.

Except, of course, to begin hoarding immediately.


So what's behind this doomsday prediction for professional appreciators of Irish brain lubricant? Science, of course. And economics. And climate change.

See, whiskey--good whiskey--is kind of like the ultimate slow food. It takes years to produce the aged stuff, and even though whiskey distillers are generally pretty good about being able to see into the future and match supply to demand, what none of them saw coming 10 years ago when today's aged whiskey was first being put to bed was the massive spike in whiskey drinking occurring today.As just one example, the folks at Buffalo Trace note that while bourbon overall is seeing a 5% growth rate (a nice, manageable number with current stock levels), the thirst for premium brands (of which Buffalo Trace is but one) is up something on the order of 20%. Which would've been great if, 10 years ago, someone had gone around to all the whiskey producers and told them that they really ought to up their production and storage by 20% to compensate for some mystical time when every hipster worth his mustache and tiny hat would be drinking Redbreast and Pappy like water.

Obviously, no one did that. So we're left with the stock that was put into the barrels a decade ago, just coming to maturity now. And what's there is not enough to meet the demand of today's whiskey enthusiasts.

Oh, but wait. The news gets worse.

In the course of the aging, a whole lot of tonsil-paint is lost to evaporation (the "angel's share"). And distillers are accustomed to this. It's one of the reasons why aged whiskey costs more than moonshine. And the longer the aging process, the more whiskey is lost. So science says that there is already going to be less whiskey around the older it gets. And with demand increasing--specifically and catastrophically--for the premium, long-sleeping varieties of pop-skull? Well, that's when distillers (and whiskey drinkers) begin to panic.

And the problems still aren't over.

One of the ways to mitigate the shortages (or to at least put a definitive cap on their duration) is to increase production and storage today in anticipation of continued demand in the future. And that's all well and good--except that we're also experiencing a shortage of bourbon barrels in the United States. And we're experiencing a shortage of bourbon barrels coming from the cooperages because they are short on American oak--the wood used to make bourbon barrels. The shortage of wood is a result of the long, shitty winter we just went through, and is expected to last for 12-24 months--meaning that many distilleries are sitting there with spirits in the tanks, waiting to go into barrels, but with no barrels to put the good stuff into.

All of this together adds up to bad news for whiskey drinkers--and American bourbon whiskey drinkers most of all. The shortage is here. It is bad. And it's going to get worse. Prices will rise. Certain brands will become unavailable in certain regions. And certain magazine food editors of Irish descent and the whiskey-loving persuasion are currently estimating precisely how many bottles will fit in his basement if he were to begin stockpiling right now.

We're Drinking Whiskey Faster Than Distillers Can Make More [Smithsonian]

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  • Chuck Schwinger

    it’s obamas’ fault….

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    • Mr Ghue

      Well, it does seem that his added stress to the citizens have driven more to drink. Not surprising really. And you thought it was Bush’s fault all along….

      • Dan

        No, it was Magic Johnson.

    • mebeandreaaolco

      Of course it is. What are the Repugs going to drink?

  • Zehr Alte

    Perhaps we could insist that the angels return their share.

    • A. Nuran

      And what about the devil’s share (what soaks into the barrel)? Why should Old Nick g r t free booze?

  • http://perishthereason.blogspot.com Ryan_P

    I wouldn’t worry too much about it. You might see price points raise or some brands become less available, but I think what you’re more likely to see is creative re-branding of less mature whiskeys (notice all the white whiskeys hitting the market lately?), and there’s always the possibility of non-bourbon experimentation (reusing barrels instead of new ones, which increases requisite aging time, but could offer an ideal location to store and mature distilled whiskeys while waiting for the new wood… or wood alternatives.)

    But, ultimately the best solution for the distillers is this: there are only a handful of actual distilling companies, their various impressions signify age and certain barrel quality controls. What will happen is this: in order to meet their premium demand, distillers will set aside some of the stock that they would normally pull off the rack at 4 years and let it age for 6-12 (or more in some cases). This will reduce their overall whiskey supply, but more evenly distribute the product shortfall over all their brands. And make no mistake, this is primarily a premium brand problem… which, in spite of its rapid growth, is a drop in the bucket compared to their flagship 4 year whiskies.

    I imagine that most consumers won’t even notice. Furthermore, no one should panic. Whiskey isn’t going anywhere. Remember when people were paying $200 a box on eBay for Twinkies and they came back 4 months later?

    • tjt

      thank you. I tried to write a similar comment but couldn’t word it adequately. This is relatively easily solved and mostly an excuse to jack up prices (and for Diageo to continue to push for a weakening of the naming rules re: Bourbon).

  • JB

    Jason the Alarmist! Do you drink the good stuff if you have to pay out of pocket (i.e. NOT COMPED)?

  • Son of Judd

    Throw it in any goddamn barrel you can find, like the Scots do. We’ll still drink it!

    • Steve in Philly

      My understanding is that there is a goofy law in the US that
      prohibits the re-use of barrels, unlike what is done in every other
      whiskey- (and whisky-) producing country in the world. If this law were
      repealed, there would not be a barrel shortage, and our bourbon could
      have even better, more complex flavor.

      • A. Nuran

        Your understanding is wrong.
        You can use new barrels, old barrels, whatever kind of barrels you want to make whisky in America. You can only label it “Bourbon” if it’s a new American oak barrel and the mash was at least 51% corn.

        • Steve in Philly

          Thanks. My comment below explains how I came upon that. By the way, one article I read said the requirement to use new barrels only was put in place because of pressure from the “powerful Coopers Union,” not because it made it taste better. I imagine it does make it taste better–at least oakier–but as I ask below, would you really notice it that much if Jim Beam re-used oak barrels in its base bourbon product?

          • A. Nuran

            I probably wouldn’t. Just being precise on a technical d ubject

          • WhiskyCast

            Steve, it wasn’t just the coopers in the post-Prohibition era, but there were some fairly powerful members of Congress from states with large forestry interests that also played a role in writing that requirement into law.

    • A. Nuran

      Nope. Look at the laws on what constitutes “Scotch Whiskey”.

      • PJ

        there is no such thing as “scotch whiskey.” it’s “whisky”

        • A. Nuran

          Wrongo, PJ. There is a specific legal definition. If it isn’t x% barley, aged in sherry casks, and produced in Scotland it’s not Scotch. If it’s not majority corn and aged in New American oak it’s not bourbon. If it’s not soaked it’s not whisky.

          • WhiskyCast

            Wrongo, A. Nuran…the specific legal definition for Scotch whisky does not specify sherry casks at all. In fact, most Scotch Whisky is actually aged in ex-Bourbon barrels purchased from US distillers. The only legal requirement under the Scotch Whisky Law is a minimum of three years’ maturation in oak casks not to exceed 700 liters in size, and that the whisky must be distilled from cereal grains (barley, corn, wheat, etc.). For a Scotch whisky to be legally called a single malt, it must be made from 100% malted barley and distilled in pot stills at a single distillery.

  • Bob

    Short term demand increase causing a supply problem [gasp]. Oh no, has this ever happened before in a capitalist economic system? Is there a solution for this enigma?

    Everyone relax, a simple 20 percent price raise will shake 20 percent of demand. A $20 dollar bottle will cost $24. We’ll all survive. Especially me, I don’t drink whiskey.

    • Phil

      Hahaha, worst equation ever! Ever heard anything of price elasticity? In simple words, the effect on demand depends on how important the whiskey is to the consumers. Since whiskey is so overwhelming important, most people would rather reduce their food consumption than whiskey. A 20% drop of whiskey supply could then carry an even larger increase in whiskey prices. And it gets even worse! The price increase in whiskey could even trigger an increase in whiskey demand! Oh noooo!

      • Bob

        Haha, worst analysis ever. I’m completely familiar with price elasticity (got an A in all that BS in college, bro). Whiskey is not “overwhelmingly important” as you say. As a liquor industry professional I know full well what price points both bar owners and drinkers will purchase. There are other choices, such as scotch, cognac, other spirits, wine, craft beer, the list goes on. Prices go up, the choices change, simple as that. I’ve seen people drink something they don’t particularly enjoy for the difference of a quarter. The people who thoroughly enjoy whiskey/bourbon will pay the extra money, the people in the middle will take the watered down versions Crown Royal intends to put out, the people at the bottom will go from Jack and Coke to Captain and Coke without a second thought. I see it every day at normal price points. Have a good life.

  • Mr Ghue

    Increased rate of alcoholism…

  • Steve in Philly

    “And we’re experiencing a shortage of bourbon barrels coming from the
    cooperages because they are short on American oak–the wood used to make
    bourbon barrels.”

    Also because (as I understand) there is a goofy law in the US that prohibits the re-use of barrels, unlike what is done in every other whiskey- (and whisky-) producing country in the world. If this law were repealed, there would not be a barrel shortage, and our bourbon could have even better, more complex flavor.

    • Kentuckygirl

      There is no law that prohibits the re-use of barrels to make whiskey, however there is a law that states that a product labeled bourbon be produced in a virgin white oak barrel. Jack Daniels and other non-bourbon whiskeys re-use barrels all the time. Bourbon standards are there for a reason, because that is what separates bourbons from other whiskeys. Just because bourbon has become a recent fad does not mean the standards that have been in place for a long time should change.

      • Steve in Philly

        Thanks for clarifying that. I was given misinformation on a wine tour. I asked what they did with their barrels and the guide said they re-used them or occasionally shipped them overseas for use in whiskeys. I asked why overseas, and the guide told me that used barrels they couldn’t be used to make whiskey in the US. So that seems wrong–it’s only bourbon-makers that can’t use them, I see. Other US whiskey types can be made in used barrels. Of course, I would hazard a guess that the majority (maybe vast majority) of premium U.S. whiskeys are bourbon, no? So the law still contributes to a shortfall in barrels–but I take your point on the standards.

        Anyway, marketing talk aside, does bourbon really taste better because it is aged in new oak barrels rather than used ones? Maybe it does, but I know that a lot of those barrels are then used by top-quality scotch distillers and it doesn’t seem to in any way hurt their product. Maybe you would notice the difference in a Pappy Van Winkle or Woodford, but would you notice it if mass-produced Jim Beam reused an oak barrel. (No offense intended, Kentuckygirl, if that is your bourbon of choice!)

        • WhiskyCast

          Steve, you might not have been given bad information. In fact, some wineries do ship their barrels to distilleries in the US and overseas for use in whiskeys. They’re used as “finishing casks” to add an extra dimension of flavor to a whiskey after the main period of maturation. For example, Dad’s Hat in Bristol has a Vermouth-finished Pennsylvania Rye whiskey that uses casks from a California vermouth producer.

      • WhiskyCast

        Let’s try clarifying this again. Jack Daniel’s is technically a Bourbon, but the distillery’s owners choose to call it a “Tennessee Whiskey”, and do use new oak barrels. The law only requires that a distiller meet the Bourbon standards to be able to call it a Bourbon, not that it must be called one if it meets the standards. In fact, the “Tennessee Whiskey Law” you might have read about recently that was passed last year in Tennessee requires distillers to meet the same standards as Bourbon in order to be able to call their whiskey a “Tennessee Whiskey”.

  • Jim Koval

    The is an awful article. Hints at climate change but offers no evidence (or us that the long hard winter part, huh? I thought it’s getting warmer) American bourbon???? There’s no other type of bourbon. Bourbon can only be made in America.

  • PJ

    well, there’s always whisky

    • Bill

      Maker’s Mark Whisky…check the label.

  • WhiskyCast

    Relax, gang…while there may be shortages of some whiskies at times, there will be enough to go around.