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This fall the Last Drop Distillers readies for release a 1980 vintage bourbon. Aged in virgin oak over 18 Kentucky summers, the liquid was eventually transferred to steel tanks where it mellowed for a further two decades in a temperature controlled warehouse. The resulting whiskey sings with stunning depth. It strikes a surprising compromise between barrel and underlying grain. Even more shocking is the price: $4,500 a bottle.
Eleven miles south in the Bluegrass State, Woodford Reserve has just unveiled its Baccarat Edition, a $2,000 bourbon that rests for three years in casks formerly reserved for XO cognac. Magnifying the rich, elegance of the juice is the decanter in which it is housed—handmade, etched crystal plated with 24-karat gold by the eponymous French fabricator.
It wasn’t long ago that if you were forking over this sort of cash for booze it was almost assuredly a bottle of scotch or cognac. As recently as the mid-2010s these were the only categories of spirit that could command such stately sums. But around that time the collector’s market took up an interest in American whiskey, stoked by the hype of social networks.
“You started to see these Facebook groups crop up,” recalls Aaron Goldfarb, author of Hacking Whiskey. “Before then, there had been imperfect information about what was the actual market for these allocated bottles.”
Suddenly the spirits of Kentucky—specifically Pappy Van Winkle and Willet—were fetching four figures. “Social media simply acted as a conduit, if not a hype echo chamber, for what things like Pappy were now going to cost,” he adds.
But this reflected secondary market pricing, inflated through black market resale and in bottleshops unafraid to affix a 1,000% markup upon trending products. Even today, the eldest of the Van Winkle clan (the 23-year-old Family Reserve expression) is still supposed to retail at $300, despite being the most coveted bourbon on the planet.
Then there was Michter’s. In 2013, the Louisville-based distillery bottled its first ever Celebration Sour Mash and tied a $3,600 tag around its neck. An extraordinarily limited blend of straight bourbons and ryes, it was very much intended as a statement weightier than the sum of its parts.
“Our former master distiller Willie Pratt and I were thinking that if we could put together something really remarkable, we could demonstrate that American whiskey can rival the finest spirits made around the world,” says Joe Magliocco, President and Founder of Michter’s. “That’s how we came up with the idea.”
Six batches of liquid ranged up to 30 years in age. Combined, they formed enough to fill just 273 gold-topped bottles. The barrel strength release was rendered in a scarlet-hued box echoing the tones of the whiskey itself; a perfect storm of maturity, rarity, and luxury. Magliocco remembers having to turn down orders, it moved so fast. And though it seems like a no-brainer now, a near-$4,000 bottle of high-end American whiskey was quite the risky marketing move seven years ago. “This is kind of new territory,” said spirits expert F. Paul Pacult, at the time.
But Michter’s had thrown down the gauntlet with gusto. And now that the world was safe for super-priced American whiskey, it was up to distillers and blenders to justify such a premium.
It was during this same time that WhistlePig propped up the luxury rye market. The debut of an annual limited edition known as The Boss Hog leaned heavy into the Vermont operation’s oldest stocks and saw the category’s first foray into exotic barrel finishes. By 2016, collectors were clamoring to find it at retail for $300 a bottle—roughly 15x the cost of its counterparts in the straight rye segment. This year’s seventh iteration, finished with both rare Spanish oak staves and South American teakwood, is currently flying at $500 a pop.
And there’s ample evidence to suggest that spending habits during the pandemic are actually accelerating movement along the top shelf. In August, IWSR—the foremost name in drinks market analysis—published a report predicting that premium-and-above spirits will grow their global market share from 10% to 13% by 2024.
Given that context it becomes clear why Woodford Reserve would only now opt to make its Baccarat Edition available to American consumers after a year in the global duty-free market. “We have seen a positive response in the first two weeks [since the US launch],” notes Master Distiller Chris Morris. “We’ve seen significant sales through our retail partners including Reserve Bar and wine.com as well as purchases at the Woodford Reserve Distillery. People are still reaching out to us to find out where they can obtain a bottle. This feedback gives us confidence that there is an audience for a $2,000 bourbon.”
For Jeff Kozak the reasons are myriad. “Without fine dining tabs, $500 whiskey is an affordable and necessary luxury,” explains the WhistlePig CEO. “After months of staying close to home, consumers are both diving deeper into personal hobbies and searching for experiences that take them outside their day-to-day routine. For whiskey enthusiasts, that means the hunt for the next best thing in both quality and the story in the bottle.”
Dixon Dedman knows this as well as anyone. He amassed a cult following around a story in the bottle. In 2014 he resurrected Kentucky Owl, a historic label founded by his great-great-grandfather in the late 19th century. Armed with nothing more than birthright and barrels to blend, demand for his $175-a-bottle whiskies almost immediately outstripped scant supply.
To ironically commemorate the 100th anniversary of Prohibition he released Dry State this summer. The $1,000 blend of bourbons, between 12 and 17 years in age, is his most expensive offering to date. It’s already sold out.
“I realize this release comes with a significant price tag,” he admits. “The presentation and the packaging of this product means that this is the gem of someone’s collection. This isn’t the ‘oh, it’s Tuesday, let’s open it up’ bottle. It comes from barrels that I’ve been monitoring and developing for a long time. The uniqueness and the scarcity around it—in combination with the quality—is something that I’m really excited about.”
Indeed, it’s now something that the entire world seems smitten by. In perhaps the greatest indicator that luxury bourbon and rye is ready to compete—at price—with its scotch and cognac cousins, the Far East is now ponying up. Before the Last Drop could even load its 240 bottles worth of 1980 vintage bourbon onto pallets, the region is already chomping at the bit for the $4,500 bottle.
“We’ve noticed greater interest in this release from China—hitherto not a big market for American Whiskeys,” observes Rebecca Jago, managing director for the Last Drop Distillers. “Our importer there has pre-sold his allocation already, more than a month before it ships.” This, even with the monumental tariffs the country currently imposes upon US whiskeys. A tax somewhere in the neighborhood of 88%, according to Jago.
“When I started working in the industry in the 1980s, American whiskey was in a virtual free fall—you practically had to beg someone to drink it,” recalls Magliocco. “It’s great to see people recognizing that outstanding American whiskeys can rival the world’s finest spirits. To see the premiumization of the category and the growing appreciation of American whiskey’s quality is truly remarkable.” Indeed, it seems nothing, not even global trade wars nor once-in-a-century pandemics, can curb its rise.