The inherent impossibility of accurately predicting whiskey sales five, ten, or fifteen years from now means that both shortages and gluts are inevitable. The best we can hope for is that both will be brief and mild.
So even though supplies are tight right now, it's appropriate to start thinking about the next glut.
Naturally, the whiskey guru downunder, Chris Middleton, has been thinking about this too.
"I’ve been closely tracking investment in new production capacities globally for some years now," writes Middleton. "In the U.S. over the past three years, over $430 million has been announced by the big eight distilling companies in plant and equipment for their distillery operations. Total capacity over the next five years may well double. Production may grow 50 percent or more over this period."
Middleton's records show that over a similar period, scotch producers have invested over $3 billion and increased production by over 20 percent. A dozen new malt distilleries are being built and many more are being expanded or brought back into production.
Whiskey-makers in Japan, Ireland, and Canada are growing too. So are hundreds of new craft distillers in more than 30 countries. Total investment worldwide: about $4 billion. In the five major producing countries, aging warehouses now contain more than eight billion liters of whiskey at various ages. Meanwhile, the best estimate for consumer demand growth over the next five years is about five percent per year.
Consumers may welcome a glut, as they usually start with a price war. But if producers have badly overestimated their needs it will be bad for whiskey lovers, as companies turn away from whiskey and look elsewhere for profits. So let's all pray for a short glut -- something to take the edge off -- then back to the uncomfortable tightness we're experiencing now. And, as always, pray for robust growth in China and India, upon which all of this depends.