Monday, May 19, 2014
How Bad Is the Worldwide Whiskey Shortage? Not So Bad, Actually
Suddenly the media is awash with stories about a worldwide whiskey shortage. Most are exaggerated, many are poorly informed. Just Google 'whiskey shortage' and you will have no shortage of choices. It's on the editorial radar.
There are problems with all of these, but here is a quick sampling from Philadelphia Magazine, Time Magazine, and Australian Broadcasting.
Any report you see that says or gives the impression that we are 'running out of whiskey' is wrong. We're not. There is a shortage affecting the trade, but what 'shortage' means to them is that producers and distributors are unable to fill some orders for some products some of the time. These 'outs' are generally short term.
For consumers, this 'shortage' is having either no effect or they occasionally find stores out of something specific they want to buy. These are brief, localized shortages of certain products. Nothing worse than that is coming either, although it may get a little worse before it gets better.
If you only drink one brand and that brand is one of the ones affected, you might feel very inconvenienced, but most of the people reading this are whiskey enthusiasts who like many different products. I have yet to hear of a whiskey enthusiast who went into a store and couldn't find anything he or she wanted to drink.
Maker's Mark is a good example. Not only is Maker's Mark on allocation, it has been on allocation for more than 20 years. (Allocation means that when a distributor places an order for a certain number of cases, Maker's Mark replies by telling them how many cases they can have according to the brand's allocation formula.) Supplies have gotten even tighter in the last three years, but how frequently is your primary watering hole completely out of Maker's Mark?
Part of the problem is that brands on allocation are allocated in part according to historic sales. Maker's Mark is a national brand but many brands are regional. W. L. Weller is a good example. Texas, where Weller has always sold very well, gets a lot of the Weller that's available. Recently people around the country have become aware of Weller as a Van Winkle alternative, so they're trying to find it in markets where Weller has not historically been sold. Retailers in those places, who have customers asking for it, can't get it from distributors because that city or state's small allocation sells out so fast.
Similarly, there are some very small brands that have always been in short supply, but you didn't know because you've never looked for them before. As American whiskey drinkers become more knowledgeable and go looking for the in-the-know favorites, shelves can empty fast. Producers will adjust but it may take several cycles.
And, of course, all of this talk about a whiskey shortage will prompt some extra buying, which will strain supplies even more.
Some people talk about the whiskey shortage and the barrel shortage as if they're part of the same problem, but there was no barrel shortage when the whiskey selling now was put away. The two shortages are unrelated.
The barrel shortage is mostly a problem for micro-distilleries. The big distilleries may not be able to get quite as many barrels as they want but they're getting a lot of barrels regardless, because they always have. Micros generally don't get their barrels from the same cooperages as the big guys. In some cases, micros are doubling or tripling their barrel orders as their businesses take off, and the small cooperages who supply them can't keep up. The big cooperages aren't in any position to help because their current, big distillery customers are taking everything they make, plus the big cooperages only make 53 gallon barrels while most micros use smaller ones.
The barrel shortage is mostly caused by a shortage of timber at the stave mills. Loggers have been unable to get enough trees cut and out of the forest, in part due to the recent long, harsh winter. It's not a tree shortage (there are plenty) or a cooperage capacity limitation, at least not at the big cooperages. Some have predicted this problem will last for as long as two years. It won't.
So, as a consumer, here is how you probably will experience the whiskey shortage. From time to time, you will go to the store intending to buy Old Frothingslosh, only to find them out of Old Frothingslosh. Maybe you will go to another store and they will be out of it too. The radical, earth-shattering solution?
Buy something else and come back in a month when Old Frothingslosh has been restocked.
If we all stay brave and strong we can get through this together.