Why Do Whiskey Makers Have Only Two Seasons?

 

Spring is one of whiskey's two seasons, fall is the other one.

One little-known aspect of the bottled-in-bond rules is that the whiskey must be made by one distiller at a single distillery in one season. One distiller and single distillery are pretty clear and unambiguous, but what does "one season" mean? Does it refer to astronomical seasons or meteorological seasons?

"Astronomical" is the most common method, where the seasons change on or about the 21st day of March, June, September, and December using the dates of equinoxes and solstices. According to the meteorological definition, seasons begin on the first day of those four months.

Whiskey makers use neither system. They divide the year into just two seasons. Spring runs from January first through June 30th. Fall begins July first and ends December 31st.

This system became part of American law when the Bottled in Bond Act was passed in 1897, but it wasn't arbitrary. Historically, distilleries got going after the grain harvest, typically in late summer or early fall, and kept going until the grain ran out or it got too cold. If there was grain available, they resumed distilling when the weather warmed up and, again, kept going until the grain ran out or it got too hot. 

Even after American agriculture advanced to the point where grain was available year-round, most distilleries shut down during the coldest part of the winter and, especially, the hottest part of the summer. Even today, it can be pretty miserable in a Kentucky or Tennessee distillery in August. Shutdowns are also necessary so workers can have vacations and needed maintenance can be performed.

This has become an issue with the rise of bourbon tourism, since so many people vacation in August. The distilleries still provide tours then but if you want to visit when the distillery is actually distilling something, don't go in August. Another issue is the current whiskey surplus. Distilleries typically adjust their production by lengthening or shortening their shutdowns. Again, if you're planning to visit, check the distilleries for their production schedules. Expect longer-than-usual shutdowns for the next few years.

Producers rarely will skip an entire season. Even if they're reducing production, they like to have some whiskey from every season in the warehouses. Historically, distilleries evaluate their needs twice each year but as the business has gotten bigger and more volatile those evaluations have gotten more frequent.

Back in the days of tax stamps the season and year of distillation and the season and year of bottling were imprinted on the stamp, but that requirement was eliminated in the 1980s. Bottled-in-bond spirits must adhere to the rules regarding seasons, but they don't have to disclose them on the label. Producers may disclose that information voluntarily, as Suntory has done with the Old Grand-Dad expression shown above. Putting that information on the label also tells you this is a one-off and not a permanent addition to the portfolio.

The one disclosure that remains is to identify the distillery by its Distilled Spirits Producer (DSP) license number. If it matters to you that the whiskeys you buy be 'singles,' i.e., the product of one distillery, and you'd like to know the identity of that distillery, stick to bottled-in-bond releases.

How to Win in the Brave New Whiskey World

 

As seen on the TTB website.

When approved labels appear on the website of the Treasury Department's Alcohol Tax and Trade Bureau (TTB), that doesn't necessarily mean those products will be released. This one, however, with the bottling date right on the label, seems like a pretty good bet.*

If it seems like only a few years ago that everybody was dropping age statements, it was. Although Wild Turkey 101 lost its 8-year age statement in the 1990s, and Evan Williams lost is 7-year statement in 2005, Knob Creek's decision in 2016 to drop its 9-year statement was one that really hurt, since its age was always a key part of its brand positioning. Reaction was such that, less than three years later, they restored it.

But an age statement like this, appearing as a new expression of an existing and very mainstream product, seems to auger something else. I mention Wild Turkey because they have 'restored' the 8-year age statement on Wild Turkey 101 for special editions, such as the current one celebrating Jimmy Russell's 70th anniversary, at special edition prices. This, I believe, is not that.

We don't know yet what the pricing will be on 7-year Grand-Dad, but if Suntory plans a high price, they are badly misreading the room. I suspect the suggested retail will be a modest upcharge over the standard BIB and will come out of the box heavily discounted. I predict this, in part, because they chose to do this with Old Grand-Dad and not Basil Hayden, which uses the same liquid but has more premium positioning.

This, I believe, is the beginning of a trend, the purpose of which is to blow out excess inventory.

I've been thinking about how regular, everyday whiskey drinkers here in the USA can take advantage of the current situation. Watching for this sort of thing is one of the ways.

First, where we are. I said "in the USA" because most of the recent noise has been about tariffs, if and when they go into effect. The more immediate and predictable situation has nothing to do with tariffs. It is the decline in sales that seems to mark the end of the bourbon boom.

Let's not overstate it. American whiskey sales declined in 2023 for the first time in more than 20 years, and 2024 was even worse. The 'boom' was a period of growth that was not sustainable. The recent talk from industry leaders touting illusory export opportunities is a good indicator that growth has slowed, and the industry has overproduced. Other factors affecting whiskey sales include ongoing post-COVID supply chain distortions, the effects of cannabis legalization and of weight loss drugs that seem to also suppress the appetite for alcohol, and what appears to be a younger generation with less interest in alcohol than previous cohorts. 

So, is there a whiskey glut? 'Glut' is an ugly word. 'Surplus' sounds better. Because of the aging cycle, producers know one thing for certain. They never get production planning exactly right. They always make either too little or too much. We just went through a long period of too little and are entering a period of too much.

But that doesn't mean the sky is falling. Don't bet against alcohol. It has survived worse, like being entirely illegal for 13 years. More specifically, American whiskey's gains over the last two decades are not disappearing. Growth may be slowing or even flattening, but double-digit sales declines like the industry saw in the 1970s and 80s are not on the horizon.

Probably.

On the positive side, the United States has gone from having about 50 active distilleries in 2005 to more than 3,000 today. Most of those 3,000 are small, but several hundred are not.

Ten years ago, eight companies distilled virtually all of America’s whiskey at thirteen distilleries. Three years later, there were ten companies operating fifteen distilleries. The additions were at the low end of the scale. Today, 16 companies operating 26 distilleries control about 94 percent of America’s whiskey production capacity. 

Again, the newest companies have come in at the low end. Meanwhile, the Big Four (BF, Suntory, HH, & Saz) have only gotten bigger and still have about 65 percent of industry capacity. They can deal with this downturn. I worry about the folks who are just getting started, whose plans did not anticipate tapping the brakes this soon.

But about tariffs, the European Union is and has been the largest American whiskey export market. When tariffs were on between 2018 and 2021, exports plunged 20 percent, from $552 million to $440 million. The EU suspended its tariffs in 2021, enabling exports to surge back even higher — to $699 million last year. 

Tomorrow? Who knows? Just as disruptive as tariffs themselves is uncertainty about tariffs.  

If exports decline that will mean more whiskey for us in the U.S., but that means we won't have help reducing the surplus. The industry needs to correct by reducing production and blowing out some inventory. I'm confident if we drinkers do our jobs and drink like I know we can, the surplus will be absorbed in no time. 

If your drinks portfolio includes other types of spirits, your scotch, tequila, and brandy budgets will probably go further buying American whiskey instead.

Yes, data shows that America's pantries are already overloaded with spirits, but I know people who have built room additions so they could buy more whiskey.

Don't think this means unicorns like Van Winkle will suddenly be plentiful and cheap. If that's your jam, though, be on the lookout for liquidations from folks like Penelope and Barrell. Just don't buy them intending to flip them for a profit on the secondary. While that probably won't go away, I expect it won't be as robust as it has been in the past. If you see something you want to drink, however, the price might be right. 

We probably won't see bargains on anything genuinely collectible or flippable, but expect good deals on drinking whiskey. Some of it will be on brands you know, like Old Grand-Dad, but some will be on brands you've never heard of because they were created for this purpose. Read the labels, especially age and proof statements. As usual, avoid products whose labels are obtuse or misleading. They are a poor bargain at any price.

All we know about this Old Grand-Dad expression comes from the TTB. Suntory hasn't said anything. But we'll keep our eyes open.

* According to custom, and TTB rules, 'spring' runs from January 1 to June 30.