Mark Brown on the Bourbon Shortage

Here is more detail about the bourbon shortage discussed here on Wednesday, courtesy of Sazerac President Mark Brown. (Sazerac owns the Buffalo Trace and Barton 1792 distilleries.)

On pricing: "Costs have been increasing for energy and raw materials like corn," says Brown. "Any price increases we are implementing, or contemplating, are primarily tied to recovering those cost increases, as opposed to changing any brand’s position."

On brands: "Each and every brand has a specific sales forecast out through its product age plus several years and therefore has its own allocation of whiskey," says Brown. That means for, let's say Eagle Rare Single Barrel, a 10-year-old, that they have allocated existing whiskey stocks based on meeting sales forecasts for 10+ years. If actual sales exceed the forecast in any of those years, shortages could occur, but since forecasts and inventory allocations are periodically adjusted based on actual sales, adjustments to production are made the only place they can be, in the current year.

On staffing: "We are actually ahead of the curve since we anticipate the need to manage sales, allocations and stocks increasing more so in a year’s time from now," said Brown in response to comments here and elsewhere that Buffalo Trace should have hired its new inventory manager sooner.

On the press release itself: "We felt it was time to explain why folks are already seeing gaps on the shelves (i.e. Weller 12) and from our vantage point why those gaps will be occurring on various brands for some time to come," says Brown. "We have had extensive debates about what to do about the supply / demand imbalance and our conclusion is that the best thing to do is stay the course with each brand’s position in the market and spread the available supplies out as evenly as we can."

It should be noted that this is an issue throughout the entire whiskey industry. Sazerac is now on-the-record as to how it intends to deal with the matter. If any other producers decide to weigh in on the subject, you'll read about it here.