Let me reemphasize, I’m not judging artisan or producers with extremely small productions.
You probably should. ![[rofl.gif]](/uploads/db3686/original/2X/a/a7452fcd8e675af869f8da01174474a545b03944.gif "rofl"){kind=small}
You have to sell a lot of $10 bottles of wine to reach $47 billion.
Decent whisky barrels cost a lot more than that, unless you are Beam Suntory and own bourbon distillers already. A good sherry cask right now for scotch costs 750 gbp.
Truth is that prices are all over the place, here’s the average…
uh, because it tastes better? ![[stirthepothal.gif]](/uploads/db3686/original/2X/f/f40faec63ca1018898a40805efbf9f0066a3d205.gif "[stirthepothal.gif]"){kind=small}
Robert A Jr. wrote:
Touching side note to me, my son just turned 21. We were staying at the Mandarin in Miami over his birthday weekend. He went out with his cousins after dinner on his birthday, came back to the hotel around midnight. Went to the bar and started sampling some faves like Macallan, Oban and a bourbon with a friendly bartender there that learned that night was his 21st. Ran up quite a bar tab, but the next morning, told me he wanted to experience what I experience, and said he gets it. Was a nice connection. My dad introduced me to the elegance of fine wine and spirits, and moderation and it remains a deep-seeded connection today. My son and I enjoyed burgers and wine tonight.
That is awesome, Robert. Our son is 25 and is also enjoying red wine. Not as much as spirits, but he is starting to appreciate the joys of good red wine. He likes Ridge, like his parents!
Ed
Couldn’t agree more. Love K&L’s single malt selection, their ban on shipping booze interstate is such a bummer.
A related surprising turn of events is that single malt scotch from good producers can be purchased for less than the more popular bourbons. 12-18 year old Scotch imported to the US going for less than 6-8 year old bourbon produced just across the Ohio River from me.
Again, the answer to the inherent question is noted above-supply and demand. The craze for bourbon (and Japanese whiskey) is just that; crazy.
Love K&L’s single malt selection, their ban on shipping booze interstate is such a bummer.
Don’t know where you are located Pat, but I have been pleased with Wine Chateau. Great selection and decent pricing. They obviously have a complex sourcing system; sometimes they charge my card and then take two weeks to source and ship.
This does not surprise me at all.
With many of my friends and family, I see a direct correlation between the consumers of the new bourbons and the Cult Calis, compared to the more Euro-inspired palates, preferring for example, Scotch and Bordeaux.
First off, I’m a huge bourbon and Scotch fan. The lions share of my everyday wardrobe says the word BOURBON on it somewhere. I enjoy a Manhattan most every day and am not adverse to a late night sipper (been favoring the very delicious Old Forester 1920 lately). I believe my brown liquor credentials are in order.
This being said there is almost no way I would pay over $100 for a bottle of whiskey. I attended a deep and large tasting of Eagle Rare a couple of years ago. Folks brought literally 2 dozen different permutations from older stuff, shop selections, single barrel and shit most people have never heard of let alone seen or tasted. I’m not the biggest ER guy and I’m not attempting to get into a debate about the merits or lack thereof in folks’ minds about the brand. Suffice it to say there were bottles that cost $100s in this tasting. Everything was really good. That being said the difference between the least good one to the most good one was astonishingly small, IMO. In a wine flight with that many wines and examples the range would have been enormous (for better or worse). That tasting reinforced my belief that you simply don’t need to pay exorbitant prices for excellent whiskey. You may prefer your Pappy 23 to my OF 1920 that I can buy off the shelf of most liquor stores in Oregon for $55 but at the end of the day I’ve still got a great bottle of bourbon and, unless you’re one of the lucky ones that gets it before the round of markups ensue, a lot more cash in my pocket. And, if you’re willing to part with some cash I’ve got a bottle of Ray Walker Bourbon that’s still 95% full.
Wine? While I’d prefer that I DIDN’T have to pay the freight for what the best wines go for but I would and do for certain things because of the nearly unreachable/unmatchable quality they can have. Not saying I’m right or wrong but that I am pretty steeped in alcohol in one way or another and have experience and strong opinions.
The cost and availability of ingredients is the key, I think. Grapes are much more expensive than grain. And there’s essentially no limit on production of grain-based spirits, as Leo points out. If you want to double production, it’s no problem to get the barley, corn, rye, potatoes or whatever.
It seems to me that barrels are not the reason fancy wines are so expensive. I don’t know the market prices of different barrels (that price chart explains why Scotch is more likely to be aged in Bourbon than Sherry barrels these days), but I would think barrels are a much bigger cost of whisky because it stays in barrel so much longer. Distillers have a lot of capital tied up in both barrels and inventory (their whisky) for so many years.
Barrels shouldn’t be a significant factor in the cost of classic Barolo, Barbaresco and many Northern Rhones that are aged in large casks that last for decades. White wines, of course, generally see much less time in barrel.
It seems to me that the real commodity, the largest investment, is time. While it’s obviously true that grapes are more expensive than grain, there is no shortage or lack of availability of either. Just because chicken is cheaper than beef, it doesn’t keep restaurateurs from charging comparable prices for the respective dishes. While the spirits maker is sitting on their product for 12 years or longer, the winemaker is drawing revenue annually for their product. If there is any justification for the exorbitant price of so many large production wines, it’s probably the price of real estate and perhaps taxes.
Bourbon makers are paying taxes on that bourbon every year it lies in the Rick houses. Added to that they are paying tax on the full 42 gallons for each barrel regardless if they’ve lost 20+% to angel share.
So are you saying that the cost of grapes isn’t as big a factor in the cost of production as the aging time in barrel?
Sure, Central Valley ruby cabernet is plentiful. You could compare wines made from those kinds of grapes to cheap Bourbon or blended Scotch, and the wine would likely be cheaper. But if you want, say, Napa cab fruit or grapes from the Medoc or the Cote d’Or, they are absolutely not plentiful or cheap.
Growing grapes is quite labor-intensive (see UC Davis study). Once the vineyard is established and producing, you still have to prune, graft and replace some vines periodically, thin the canopy, perhaps green harvest, then harvest, and the early months in the cellar require a lot of attention. It ain’t like buying grains, throwing them in a tank and letting them ferment.
In the New World, vineyard land prices is also a huge factor in the cost of wine that we haven’t really touched on. Obviously, that’s not an issue for spirits makers buying grains on the commodities markets. (Thankfully, in the Old World, where many properties have been handed down through the generations, few wine producers are evaluating their properties based on returns on invested capital – profits as a percentage of the current value of their assets.)
As for chicken and beef, I find most restaurants do charge substantially more for most beef dishes than they do for chicken.
Wouldn’t a winery like López de Heredia be a comparable operation to a large scale whisk(e)y producer?
They control everything including the long term aging, very fine quality but little hype, and therefore reasonable prices for what’s in the bottle.
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Is there any farmland for whisky that goes for the price of an acre of land in Napa or a hectare of a grand cru vineyard in Burgundy?
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Is there any reason a whisky producer has to limit production the way say an owner of Chambertin does (because he can make only so much Chambertin)?
Certainly the working capital they have tied up in aging inventory is similar to whisk(e)y!
Back around 2009, at the worst of the economic downturn, 2002 Cristal was available locally for $130. In fact, most high end wines available locally were severely discounted. There has been almost a decade of economic prosperity. When the next recession takes place, I won’t at all be surprised to see a lot of $100+ bottles clogging the pipeline.
High land prices in desirable wine regions are a function of wine prices, not the other way around. If Napa cab producers couldn’t get $100 (or $500) per bottle because they needed to compete with whisky/whiskey on price, then Napa land would cost a lot less. It’s consumers’ willingness to pay LOTS more for high-end wines (not just trophy ones) from certain regions than for a comparable amount of whiskey that sets price, not underlying costs. (Sure, wine is far more labor-intensive, which sets a floor on prices of carefully made wine, since no one would make commercial wine if they couldn’t exceed their marginal costs. And there is a minimum amount of capital equipment required to produce fine wine that must be recouped. Other costs – e.g. extra labor and extra capital and extra land purchase financing-- used by high-end wineries is only available because they expect pricing to support those costs.)
Uber-trophy wines and whiskeys (maybe <0.01% of the market!) are not really the point of the OP. I think Jim A. has nailed it – lots of liquor options well below $100 satisfy almost all highly discerning consumers. [Its better value is certainly why my kids over age 21 buy far more whiskey (and beer) than wine when they’re not with me – different thread!] In the big scheme of things, fortunately for Burgundy and Napa landowners, there really isn’t that much ultra fine wine being produced worldwide. So a relatively small bunch of (affluent and/or crazy) consumers can and do pursue wines that are not competitively priced with other well-regarded alcohol options.
Regards,
Peter