If you live in the US and you are a fan of whiskey or bourbon, you likely know what allocation day is. Around the area I live it happens every Thursday and it's a specific day of the week when companies distribute limited quantities of whiskey or bourbon to to select resellers.
In turn, customers flock to retail locations to try and get their hands on what is already a limited commodity. It's an interesting formula that leads to stores getting their hands on specific bottles. I have a friend who manages a small "party store" on the outskirts of the next city over. He doesn't push a lot of volume for the higher end stuff, but every now and then he can get his hands on some of the more special bottles.
It's not that he doesn't try. I'm pretty sure every time he places an order he asks for bottles of the special allocation stuff. Most notably the offerings from Buffalo Trace distillery. Bourbons like Weller, Blanton's, Eagle Rare, E.H. Taylor, and yes, even Pappy Van Winkle. I remember he actually did get his hands on a couple bottles of Eagle Rare, but I think it was more of a fluke than anything.
Meanwhile, a couple of miles away across the river is a larger store that focuses specifically on beer, wine, and spirits. They even make trips down to Kentucky to pick specific barrels of bourbon to have bottled so they can sell it in their store as a barrel select offering. Stores like this have little trouble getting their hands on special allocations, but they are still limited quantities and gone within the first hour of opening. Carried off to sit on someone's shelf and hopefully be adequately enjoyed.
There's another term in the whiskey/bourbon community called "Tater". I'm not sure where it originates from, but taters are people who chase after those rare bottles ignoring all other whiskey and bourbon at their disposal. They then post pictures of them on social media bragging about what they have. They might not even like whiskey, but they know it is rare, so they chase after it for the clout.
Even worse, some folks get these bottles and then resell them at insane prices. Prices that people are more than willing to pay just so they can say they have a bottle of the stuff. Blanton's is the perfect example. I paid $65 a piece for the two bottles I have. I could turn around and sell them for over $100 a piece if I wanted to. After having had Blanton's many times, I honestly don't feel like it is worth over $100 for a bottle and I would never buy it at that price. At retail, it's a decent pour.
Whiskey and bourbons have been a hot commodity over the past five to ten years. Perhaps it was Covid, maybe it was something else, but there has been a huge boom in the industry. Major distillers have been expanding, craft distillers have been popping up everywhere, and everyone is trying to cash in on the whiskey boom. That is slowly coming to and end though.
First things first, let's clear this up right now:
All bourbon is whiskey, but not all whiskey is bourbon.
There are certain criteria whiskey has to meet to be considered bourbon.
- A mash bill of at least 51% corn
- Distilled to a proof no higher than 159 (79.5% ABV)
- Aged in new charred oak barrels for at least two years
- Entered into a barrel at no more than 125 proof
- Bottled at no less than 80 proof
Additionally, there are some other criteria when it comes to bottling bourbon. Straight bourbon that is aged for less than four years needs to have an age statement on the bottle. Bonded whiskeys are required to be aged for at least four years and if it is labeled "bottled-in-bond" it has to be bottled at exactly 100 proof.
Sales of whiskey have started to slow down over the past year or so. This means that all of the production these companies have been ramping up to meet the demand are sitting on shelves waiting to see what is going to happen with them. Plus, you need to take into account the folks who don't actually drink the stuff. Whiskey, whisky, and bourbon have seen a huge speculative market in the past several years as well.
I remember someone talking about buying fractional shares in a very rare aged for decades scotch that they will likely never see let alone taste.
This excess inventory of whiskey and bourbon has created what some are calling a whiskey glut. The good thing is, storing this sort of thing in barrels for a longer period of time isn't necessarily a bad thing, but the actual logistics of doing that as always costs money. Money that distillers may not have if people aren't buying like they used to.
Personally, I think the places that might benefit the most from this are the smaller distilleries who haven't been around as long. Many times up and coming distillers source their whiskey or bourbon from the bigger players. They then blend those whiskeys together to get the specific flavor profile they are looking for.
This excess inventory could be a boon for smaller distilleries who are in the blending business. Despite the downturn in whiskey sales, there also seems to be a small boom in American Single Malts lately. I've seen more and more places start offering their own American whiskey in the style of the whisky folks are more familiar with across the Atlantic.
In the end, this "glut" likely won't mean reduced prices for consumers, especially if the tariffs eventually kick in, but it's always a good idea to keep an eye on your store shelves for bottles that they are trying to move at a reduced price due to discontinuation or closeout.
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