Hey, we know we can’t get away with trying Prohibition again, so let’s just tax alcohol until no one can afford it instead! With bonus thought of: And pot is great, but only if we make sure that the government strictly controls your personal use of it.
These friggin’ people.
Thoughts from rational people.
I feel a bit like Kevin Bacon today, folks.
There is a sudden surge of panic stricken articles and posts out there proclaiming the “Whiskey Apocalypse“, and that the world is on “the Brink of a Whiskey Crisis“. No less luminary a publication than Esquire suggests you start hoarding.
Everybody freak out! Run in a panicked mob down the street to the nearest taverns and drink all the brown grain liquor before someone else does! Just let me get out of the way first, since I don’t want to be crushed flat like a cartoonish Chip Diller.
All clear? Good, for those of you still here, instead of lying face-down on a bar top, clutching the last empty of Jim Beam in your desperate fingers, let’s calm down. Yes, there is a whiskey shortage. It has been going on for some time. It is only going to get worse for years to come. This is not news.
As near as I can tell, the latest round of hand-wringing over how you won’t even be able to buy a Manhattan in a few weeks stems from this press release by Buffalo Trace, a company which has recently become the indisputable king of marketing by media hype. It is entitled “BUFFALO TRACE DISTILLERY UPDATES BOURBON INVENTORY SHORTAGES”, and every article written recently about the coming Bourbon Dust Bowl seems to lead back to it. The writer should get a raise. There is precisely one item of news in the seven paragraphs, and that is that Buffalo Trace has hired a new distribution guy… OK, a new “full-time barrel allocation manager”, a move that is apparently part of their already existing business plan, not some Hail Mary pass to preserve the Republic.
What is going on with Bourbon, and other premium American whiskeys, is called Capitalism and Market Forces, and everything is going to be all right. Can we please get straight what is going on? Several things that are commonly being freaked out about in the stuff being written in this latest wave of bourbon hysteria are either incomplete, or misunderstood.
First off, there is the question of what is causing the shortage. Most people realize there are two sides to this, the supply of the product and the thirst for it. The proximate cause for the “crisis” comes from the demand axis of the graph. There has been, and will absolutely continue to be, a huge increase in the numbers of in the numbers of bourbon drinkers, and how much they drink. But it isn’t because of this guy:
It’s because of these guys:
If it was just the current Cocktail Renaissance fueling whiskey demand, the demand spike would be much smaller, probably already peaking, and possibly a bigger problem for the industry. But half the world’s population is only now having its first taste of bourbon, and at the same time it is gaining access to the means to buy its subsequent tastes. It is a reasonable bet that foreign desire for American whiskey is going to continue to drive up demand. I suspect that this is actually a good thing. Human industry handles long-term growth in demand very well over the long haul, thank you. Look it up. (Kids, that’s a turn of phrase people used before “Google It” came into vogue. To “look something up” you bike down to a storefront search engine called a “library”. Be sure to stop off at the malt shop on your way down.)
Demand spikes, as we would be looking at if this were really a hipster led issue, lead to bubbles. Bubbles lead to crashes. Crashes lead to economic dislocations and bankruptcies. Bankruptcies in the whiskey business lead to orphaned barrels of good stuff being sold off at fire sales and being diluted with water and caramel coloring and put in Early Times bottles. No one wants that.
The challenge for the distillers is going to be balancing pricing with the new demand, not getting too far out in front of the price wave and getting a reputation for being over-priced or gougers, nor too far behind and becoming competitively disadvantaged because of all the money left on the table. Most of these guys are damn sharp businesspeople. So be happy that the economic health of the people who make the good stuff is largely assured, as long as they manage their businesses well and don’t bollix up a good thing. If they do, screw ‘em, it’ll be because they deserve it for being bad at capitalism.
So no, demand pressure is not a new thing. Nor is it a bad thing. Yes, bourbons are going to get a bit more pricey in the next few years. And yes, when Buffalo Trace’s new full-time barrel allocation manager or one of his colleagues at other distilleries mess up, you may find your favorite bottle is not available during all given runs to the package store. But prices for bourbon will not get out of control, and supplies will not run out. Why? Because this exists. And so does this. And many others.
In the long run, demand for bourbon will in fact be easily satisfied. Why? Because, Malthusians (Motto: Being utterly wrong about our core beliefs since 1798!) aside, the world is not running out of corn.
Most people understand this last fact at a deep core level, so this current mini-hysteria wave has felt the need to discover two new, completely unheard of things that will not ever let bourbon production catch up to demand. Barrels and angels.
Yes, not only are there ravening hordes of hipsters, roaming Williamsburg and guzzling Knob Creek like there is no tomorrow, but also God has sent a horde of Angels to punish us for our wicked ways by stealing half of all bourbon made from inside sealed barrels before it can be bottled! To hear all these writers go on about the Angel’s Share, you would think this was something new that presents some sort of barrier to increased whiskey production.
You might equivalently say that we will have difficulty producing more milk in the future because we have to pump it out of cows. We have always had to pump milk out of cows, and always will. Likewise, Gabriel, Michael, Raphael, and the rest of the gang have been swilling barrel-strength Jack Daniels since the day Jack first put his whiskey in wood. Transpiration losses are simply a part of how whiskey is made. They are known and expected and nothing out of the ordinary, and they don’t make it take any longer to make a good whiskey.
If you are wondering how this sudden rash of heavenly drunkeness became a concern to anyone, may I suggest you check a certain press release mentioned above?
Nearly the same goes for barrels. Yes, American cooperage operations are stretched tight right now, but in truth, they have been for a long time. Overall, cooperages are getting bigger, at a responsible rate in reaction to demand. We are not running out of white oak for making them either. (One of the ways that the US does a far better job of decreasing net carbon dioxide emissions than any other industrialized nation on Earth is our aggressive program of re-forestation. That’s right, folks! Drink more whiskey and you can help stop Global Warming!) Distill all you want, the coopers will manage to make more barrels.
Again, yes, increasing demand for barrels and for corn will put pressure on prices as well. It doesn’t help that the government keeps spending our money on turning good corn into bad fuel, but again, not enough to really matter in this situation.
So what is a drinker to do?
First, do not follow the recommendation of Esquire. Don’t rush out and put all your ready cash into cases of booze. That is a bad idea for the market and everybody else around you. When consumers start to hoard en masse, they end up causing the very circumstances they wanted to hoard to avoid. You get a huge spike in demand, which causes outrageous prices and shortages all over the place. So don’t hoard, or my whiskey drinking self will end up like Kevin Bacon—squashed under your spooked feet.
And in case your response is, “Hey bub! Every man for himself,” don’t hoard because it is stupid for the hoarder, too. A stock of booze, while it doesn’t go bad, is a non-productive asset. It is not going to appreciate faster than the market. It does not improve with age. And the money you spent on it, you could have saved or spent on something you use to make yourself more productive, either of which would give you more money to spend on the same booze when it is more expensive later. In the mean time, your spouse will be yelling at your during the intervening years to give them back their storage space.
If you are going to hoard some whiskey, lay down something like Jim Beam or Jack. Should the apocalypse come, that shade tree mechanic you need to fix your car so you can get out of town in front of the zombie horde will just as happily take a bottle of that as he will a bottle of Angel’s Envy Rye.
Second, there is lots that drinkers and bartenders can and will do to alleviate the issue. Look into rum… and gin… and brandy… and so on. Lotsa good stuff to drink out there besides American whiskey, people. That’s called responding to a market signal. It fixes things. And in the process, tunnel-visioned whiskey aficionados may remember the rest of the world of fabulous spirits. Try coming up with some uses for less popular spirits. Convince the hipsters that Seagram’s VO is the PBR of whiskey, and the ironic lifestyle requires consuming nothing else in their (not your or my) Old Fashioneds. Do all that, and the industry will be healthy, your bank account will be healthy, everything will work itself out in a few years, and I can still buy Bourbon without a bank loan I can’t get anyway.
In case you missed it, there is a big legislative slap fight going on in Tennessee right now between corporate distilling giants Brown-Forman and Diageo. Diageo makes George Dickel brand whiskey, and Brown-Forman runs a little micro-distillery called Jack Daniels. (Disclaimer: I happily own a chunk of Diageo stock.) The dust-up is over a new bill currently pending in Tennessee that would remove all restrictions on how distillers make whiskey that will be labeled as “Tennessee Whiskey”.
Diageo is pushing the new law, and while their motives are murky (Dickel is already made in compliance with the current standards), please don’t think that this is some corporate ninja assault by Diageo on long-time tradition. It is a corporate ninja assault by Diageo on a very new law, which was itself a corporate ninja attack by Brown-Forman to begin with.
Estimable whiskeyblogger Chuck Cowdery has posted both company’s press releases on this pissing match, and a bigger pack of disingenuous corporate posturing you will not see this side of the insurance industry or government labor unions. Cowdery explicitly refrains from commenting on the debate (though his post titles reveal his leanings rather amusingly), so I will jam my oar in here.
Chuck’s post of the Brown-Foreman press release: Diageo’s Latest Mischief: Screwing Up Tennessee Whiskey
Chuck’s post of Diageo’s reply: Diageo Says It Supports “Return to Flexibility, Innovation and Entrepreneurship in American Whiskey”
First off, in a remarkably amateur mistake, Brown-Forman lists the wrong house and senate bill numbers! The listed legislation is about liquor licenses and repeat offenders. Blame the PR firm here. I can’t find the germane bill myself, but it appears to be a simple removal of any restriction on what can call itself Tennessee Whiskey. (Correction: See update below)
The Brown-Forman release glosses the current restrictions, but here they are in detail:
- Manufactured in Tennessee
- Made of a grain mixture that is at least fifty-one percent (51%) corn
- Distilled to no more than 160 proof or eighty percent (80%) alcohol by volume
- Aged in new, charred oak barrels in Tennessee
- Filtered through maple charcoal prior to aging
- Placed in the barrel at no more than 125 proof or sixty-two and one-half percent (62.5 %) alcohol by volume
- Bottled at not less than 80 proof or forty percent (40%) alcohol by volume
On the merits, this mostly makes sense. Without the charcoal filtration, you essentially have bourbon, for instance.
But as for being aged (and manufactured) in Tennessee, I don’t see it. A rick house being located in Tennessee, as opposed to North Carolina for example, imparts no unique flavor or character to the product. It is at best pointless state pride used to help pass the designation, and at worst it is protectionism.
Designations, like Trademarks, are often misunderstood. They are not created in order to provide special rights to makers of products, though they do provide those rights. They are in fact a form of consumer protection, designed to eliminate confusion in the marketplace by ensuring that certain words and phrases, and images, always something specific. In this case, adding restrictions which do not affect the end product weakens the usefulness of the designation. It also in some ways ghettoizes the designation. Bourbon does not have to be made in Kentucky, which makes that designation more robust. But whatever problem I or anyone else may have with items One and especially Four, remember the debate here is whether to have any required characteristics or not.
Important Update: The debate may have already advanced beyond where I thought it was this AM. I was wrong that Brown-Forman’s PR department got the wrong bill number. It is in fact SB2441. It was the right one in that it simply showed the proposed Chapter and Section of existing law, with all the language reserving the label for certain manufacturing processes stripped out. But now Chuck Cowdery has posted a new version of the bill that puts back all the restrictions with the critical omission of the word “new” in the barrel clause. This newer version does not, as of right now, appear on either the State of Tennessee’s legislative website or LegiScan. This probably just means that they haven’t updated the sites yet, or the amendment has not been approved. In any case, the overwhelming majority of the important stuff and the snark in this post stand. I do apologize to the PR firm in question for mocking their numeric acumen.
Brown-Forman goes on to don its tinfoil hat and describe Diageo as a bunch of scurrilous furriners who are out to destroy Tennessee Whiskey’s good name so they can sell more bourbon and scotch instead. Personally, I doubt this. Remember, Dickel is Diageo’s brand, and one they have invested heavily in making into a legit competitor to Jack Daniels, to some extent successfully. They may have decided to give up this effort and Seagrams-ize Dickel as a product. I hope not. I suspect that Diageo has other motives.
Whatever Diageo’s motives are, they do not include a sincere love for the tradition of craft whiskey distilling in Tennessee. Giant British conglomerates do not spend good money to
buy, er, lobby state legislators on behalf of small-batch distillers it does not own. (Lobbying is really more of a rental operation, isn’t it?)
Diageo’s response leads with an example of political chutzpah worthy of David Axelrod with a blank check from George Soros or Karl Rove on a Koch binge. In reply to Brown-Forman’s contention that new oak barrels (expensive items, these) make Tennessee Whiskey a premium product, they say
Interestingly, according to the website of Brown-Forman owned Early Times whiskey, the brand is aged and barreled in “used oak barrels”. Therefore, by their logic, Brown-Forman has deemed its own product inferior.
They go on to add
Despite being a competitor to Early Times, Diageo has rushed to Early Times’ defense.
Lee Atwater just called from the Great Beyond to say, “Oh well done, y’all!”
A further disclaimer: My father drank Early Times. A lot. Too much, in fact. Any attempt to call Early Times an “inferior whiskey” around these parts is fightin’ words.
That said, Early Times is inferior whiskey. Dad knew it, too. Everybody knows Early Times is an inferior whiskey. But Brown-Forman (who knows this better than anyone) does not want, under any circumstances, to call Early Times a bourbon. This is because it would be illegal, but more importantly because doing so would dilute the premium reputation of every real bourbon Brown-Forman (and everyone else) makes. Incidentally, BF does make an Early Times straight bourbon whiskey. I’ve tasted it. It does enough on its own to damage the reputation of bourbon all by itself, thanks.
Diageo’s second, less ballsy but just as immaterial, major point in their release is, to paraphrase, “hey, Scotch is aged in
used ‘rejuvenated’ barrels, and no one would argue scotch is inferior!” Again, in the same vein as anything James Carville says, this sounds extremely fair to the uninformed.
Scotch is not Tennessee Whiskey. Besides the fact that it stays in the barrel for at least twice as long, if you laid up your scotch in new oak barrels, it would taste nothing like scotch when you took it out. Chemistry tells political and economic desires alike to piss off with the same breezy ease that Math told the Indiana legislature it could not make Pi equal 3.2 just because they wanted to. Macallan’s use of used barrels has as much to do with Tennessee Whiskey as nixtamalization has to do with Creme of Wheat.
Look, both companies, tumescent prose of their PR firms aside, have some good points, and both certainly know how to make good, even great booze. Likewise, both have screwed with consumers and with their own products on multiple occasions. Whether Diageo is trying to destroy the Tennessee liquor industry to save the scotch and bourbon varieties from the Tennessee Whiskey juggernaut (spoiler: This is not the reason), or wants the chance to ruin its own George Dickel Tennessee Whiskey (again, I doubt this), or if they just have plans to manufacture an Early Times analogue in Tennessee (this is my guess), it is immaterial to whether this existing law, and ones like it, are good government or not.
I happen to think such laws are good government, absent immaterial restrictions like the Tennessee aging provision that isn’t even the controversial element here (I think).
But Doug, many of your friends and readers are now scoffing at you, saying “You are Mr. Free Market! How can you justify restricting innovation and speech like this!”
I expect they are. But this law does not stifle innovation. It does not, despite the words put in the mouth of Dickel’s master distiller, restrict in any way the manner in which you can make whiskey in Tennessee. It merely restricts how you must make whiskey that you wish to call Tennessee Whiskey. And yes, that is an imposition upon a maker’s language choices, but words are powerful things, in sales and in politics. Both sellers, and especially buyers, are best served in a marketplace that ensures that words mean what they say.
Efforts to preserve the original Pegu Club and other historical structures in Burma. It is a miracle that the buildings have survived this long in such good condition.
(My earlier post on preserving the Pegu Club, with some great pictures)
The picture atop this post is a stock image from GettyImages, as you can easily tell from the information displayed below it. It represents an important new potential in online publishing and an advance in thinking on Intellectual Property (the latter being a bugaboo around these parts). Getty recently announced that many of the images in its online catalog are now available to embed, free of charge in media outlets like this one.
For some bloggers, especially food and cocktail writers, third-party photographs are a non-issue, as they only post their own photos as an illustration of their hard, creative work. I post plenty of my own photos here, of course… some of which I’m pretty damn proud of. But in my case, as is the case of a huge swath of blogs on all subject matters, I also write about a lot more than just recipes, and Blogging 101 says that it is nice to have an eye-catching hero pic to illustrate the theme of the post. If I need an erupting volcano picture, or one of businessmen arguing over a widget, or indeed, one of a smoking hot brunette bartender cutting limes, I don’t usually have the subject at ready hand to photograph myself.
Previously, to post the specific image embedded above in that approximate size would have cost me sixty five dollars. At that price, the chances of my using that photo would have been nil. And even if I had dropped the cash on Getty to post it, that would have been, given the practice of the day now, the last Getty would likely have gotten from most any source. Why? Because had I posted it here in standard host it myself fashion, when any other writer googles “smoking hot brunette bartender cutting limes” they would be likely to get either my post or, of course, this article about smoking hot, brunette bartender Keith Waldbauer. And they would likely grab “my” picture from here and then post it themselves, maybe linking back to here. Worse, for Getty, professional marketing types who needed a full-resolution version (around $500+) would likely have a hard time finding where this vision of loveliness can be purchased, given the likely proliferation of blog posts about her that don’t link directly back to Getty. Or, you know, they might just call their Seattle office and have them hire Keith….
It is also important to note that there are a zillion bloggers, Facebookers, and Pinsters out there who neither know as much as I do about intellectual property, nor give a damn to find out. They just want that pretty picture to put on their page, and they do know how to right-click…. Getty is getting nothing but damage from these people.
With this new embed policy, Getty is showing some real foresight. In virtually no case will someone using one of these embedded images be someone who would have actually paid to use it in the past. But now Getty will maintain a direct link back to themselves in many, if not most instances of use. Look below the picture.
My social media buttons are down here!
That doesn’t sound right. It usually is said the other way, and you sound as if…
Never mind! Never mind! Forget I said anything!
See the Twitter, tumblr, and embed buttons? Or just click on the pic and go right to the purchase page. If you are a blogger and want her picture, you could still just steal the picture by downloading it. Surprisingly, they don’t even try to block that. But why bother, when you can click one button and save your own bandwidth, and your time?
Thus, when the guy at the Citrus Marketing Association sees Blue Tube Top Girl and falls in love with her, he can get that picture, and others of her, for his new print ad with a few clicks.
Getty is showing that they are learning the Apple message about content, a lesson most content providers, to their stockholders’ detriment, stubbornly refuse to learn: The way to profit from your digital content is not to surround it with guard dogs, but to make it so easy to buy that people won’t bother to pirate it.
I’m happy to be an unpaid salesperson for GettyImages. I’m glad because of course, I’m not unpaid. I get access to lots of good illustrative pictures for my general interest posts. So the next time I want to write about wild, over the top, borderline illegal office parties, I can use just the right picture, like this.