tag:blogger.com,1999:blog-3101162324715983722.post4840814864738539250..comments2024-03-16T11:28:41.525-04:00Comments on Diving for Pearls: What Was the Scotch Whisky Boom? Part 1: Value vs. VolumeMichaelhttp://www.blogger.com/profile/02288790197865570681noreply@blogger.comBlogger25125tag:blogger.com,1999:blog-3101162324715983722.post-23519095438483146202019-06-23T22:19:27.553-04:002019-06-23T22:19:27.553-04:00Yeah, the bourbon insanity continues. To my palate...Yeah, the bourbon insanity continues. To my palate too, Buffalo Trace makes good $25-$35 bourbons. Beyond that? *shrug* It's just a bummer that a bottle of regular Buffalo Trace is so hard to find in most states.Diving for Pearlshttps://www.blogger.com/profile/02373371259792882112noreply@blogger.comtag:blogger.com,1999:blog-3101162324715983722.post-18787257317999187212019-05-17T16:36:39.303-04:002019-05-17T16:36:39.303-04:00Where has this blog been all my life?! I love the ...Where has this blog been all my life?! I love the series - and I realize I'm years late to the party and only just catching up with the reading.<br /><br />May 2019: just visited a local liquor store to see what's new. JW Blue Label has a sticker "Sale: $229" (off of the previous $259) and on the shelf the actual current price says "Sale: $199, $30 off". I've seen it at Costco for around $175, I think. I wouldn't ever buy JW Blue, it's just an example of "premiumized" Scotch. I haven't seen single malts prices come down. And there is still some irrational insanity going on with Buffalo Trace juice - the pappy fever seems to have metastasized and even the more basic bottlings are being hunted to extinction - Weller Antique 107 and even the basic Buffalo Trace 90-proof. EH Taylor and Eagle Rare used to be on the shelf but no longer. I've tried Eagle Rare and Weller Antique 107 - they are definitely very nice $25-35 bourbons but that's about it.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-3101162324715983722.post-31134179759417666332016-03-10T18:00:48.634-05:002016-03-10T18:00:48.634-05:00Thanks, Richard! The Whisky Reviewer is great, and...Thanks, Richard! The Whisky Reviewer is great, and thorough. Plus we seem to have similar palates when it comes to bourbon (Elijah Craig BP and Blanton's), which makes you both great and correct.Diving for Pearlshttps://www.blogger.com/profile/02373371259792882112noreply@blogger.comtag:blogger.com,1999:blog-3101162324715983722.post-13354710311934789962016-03-10T09:10:14.604-05:002016-03-10T09:10:14.604-05:00Excellent work. Come check out The Whiskey Reviewe...Excellent work. Come check out The Whiskey Reviewer's Friday featured op-ed. I'm citing your stuff.Richard Thomashttp://whiskeyreviewer.com/noreply@blogger.comtag:blogger.com,1999:blog-3101162324715983722.post-63939090197461028722015-05-05T11:17:57.934-04:002015-05-05T11:17:57.934-04:00I've okayed this comment to be posted, but I&#...I've okayed this comment to be posted, but I'm concerned that it's some sort of clickbait and I have issues with everything on that page. Firstly, there are considerably fewer than one billion bottles of whisky (as per the slug line) bottled per year, and certainly fewer than 1.19 billion (as per the actual counter) being exported annually. There are AT MOST 750 million being exported at this point.<br /><br />In the blue text box it reads "The longer a whisky is stored, the stronger and darker it is." That is almost wholly untrue. In the cool conditions of Scotland, the ABV reduces each year. In warmer climates, like Kentucky, it may rise. Ardbeg Galileo did not go into space, instead Galileo was an bourbon cask matured, marsala-finished special release by the distillery (their worst reviewed one, no less). A test tube of oak and Ardbeg spirit is what went into space. In the text box in the upper right hand corner, I'm not entirely sure what the upper paragraph means by "outsourced by the burning process", then the second paragraph is something that's no longer a given fact now that whisky geeks are testing out old bottles and finding consistent changes to the whisky within. The text box about investment is at best debatable and cites no sources for its claims. In fact there are no sources cited for any of the information on that page.<br /><br />If the commenter who left this link (or anyone else out there) is the creator of the above site, I encourage you to cite your sources on your page, and double check all the information you've listed because there are more inaccurate statements about whisky made online than there are accurate ones.Diving for Pearlshttps://www.blogger.com/profile/02373371259792882112noreply@blogger.comtag:blogger.com,1999:blog-3101162324715983722.post-45877766442005821392015-05-04T04:41:11.234-04:002015-05-04T04:41:11.234-04:00http://live-counter.com/scotland-whisky-production...http://live-counter.com/scotland-whisky-production/Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-3101162324715983722.post-61074847167102289842015-01-11T21:12:27.545-05:002015-01-11T21:12:27.545-05:00I agree. I'm interested in seeing what's g...I agree. I'm interested in seeing what's going to happen to the American whiskey industry. Bourbon prices are ascending and Scotch-style "premiumization" has begun with long-aged bottlings. The Kentucky Distillers' Association may have some info but Buffalo Trace doesn't belong to their group. And most of the tiny new distilleries are privately owned. So it's difficult to get real numbers. Perhaps there are some export stats out there to be found.Diving for Pearlshttps://www.blogger.com/profile/02373371259792882112noreply@blogger.comtag:blogger.com,1999:blog-3101162324715983722.post-51479415799934505902015-01-11T21:07:31.510-05:002015-01-11T21:07:31.510-05:00In 70 years, I will be that father.In 70 years, I will be that father.Diving for Pearlshttps://www.blogger.com/profile/02373371259792882112noreply@blogger.comtag:blogger.com,1999:blog-3101162324715983722.post-44769012651591987782015-01-09T19:25:36.069-05:002015-01-09T19:25:36.069-05:00It would be interesting to see a similar analysis ...It would be interesting to see a similar analysis on craft/small batch American whiskies. Lots of similarities with Scotch whiskyAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-3101162324715983722.post-41287531621097739422015-01-08T15:04:20.451-05:002015-01-08T15:04:20.451-05:00That statistic fully justifies the joke with the o...That statistic fully justifies the joke with the old man being interviewed about the secret of his long age - "It's living clean: never smoked, never put a drop of that alcohol poison in my mouth". Then a big ruckus occurs -"What's that?" "Oh, never mind, it's my dad, back from the pub, drunk as a skunk as usual!" Florinhttps://www.blogger.com/profile/14445344658258056628noreply@blogger.comtag:blogger.com,1999:blog-3101162324715983722.post-60356363685618589392015-01-08T12:27:47.807-05:002015-01-08T12:27:47.807-05:00On second thought, the whole whisky-price-versus-t...On second thought, the whole whisky-price-versus-the-CPI analysis is going to need its own post. It's a subject unto itself, when looking at the historical picture.Diving for Pearlshttps://www.blogger.com/profile/02373371259792882112noreply@blogger.comtag:blogger.com,1999:blog-3101162324715983722.post-65786768455139969592015-01-07T18:37:15.047-05:002015-01-07T18:37:15.047-05:00Thank you! Hoping to post it this week.Thank you! Hoping to post it this week.Diving for Pearlshttps://www.blogger.com/profile/02373371259792882112noreply@blogger.comtag:blogger.com,1999:blog-3101162324715983722.post-28368701260544776972015-01-07T18:36:16.241-05:002015-01-07T18:36:16.241-05:00Thank you! A little real exuberance is okay, but w...Thank you! A little real exuberance is okay, but when it's artificial excitement utilized to separate people from their income, then I get itchy. And then I write really long posts.Diving for Pearlshttps://www.blogger.com/profile/02373371259792882112noreply@blogger.comtag:blogger.com,1999:blog-3101162324715983722.post-17009242748262957842015-01-07T18:31:01.842-05:002015-01-07T18:31:01.842-05:00Thanks for the link! That's a fun document, fo...Thanks for the link! That's a fun document, for a specific sort of person. :) Page 19 shows quite a drop off in on-trade drinking. I guess everyone's drinking at home. I also like the chart on pg. 26 that shows that people over 85yrs are drinking (as much as or) more spirits than their kids! If I make it to 85, you can bet your ass I'll be drinking whisky.Diving for Pearlshttps://www.blogger.com/profile/02373371259792882112noreply@blogger.comtag:blogger.com,1999:blog-3101162324715983722.post-12561645265481864552015-01-07T18:17:11.303-05:002015-01-07T18:17:11.303-05:00Hey Florin, as an astute money person comments ano...Hey Florin, as an astute money person comments anonymously below, there may be some GBP inflation in the mix, even though whisky and CPI inflation have never danced together throughout history. If we do count the UK's inflation during that time period, that's worth about 17% right there. So if we add in the 8% then that's somewhere around 25%. The rest, the ~60%, is the heart of the cut (if you'll allow).Diving for Pearlshttps://www.blogger.com/profile/02373371259792882112noreply@blogger.comtag:blogger.com,1999:blog-3101162324715983722.post-54618526906465839952015-01-07T18:05:35.128-05:002015-01-07T18:05:35.128-05:00Hey Anonymous, thank you for this observation. Sin...Hey Anonymous, thank you for this observation. Since last night I've been waiting for someone to bring up inflation. I've been going back and forth between the reports, and while there are adjustments made here and there, I do not think the SWA is adjusting for inflation in their reporting. So, from one perspective Inflation is the best challenge to everyone's rant about the price of whisky going up (and a number of the charts above).<br /><br />Historically, the price of whisky is WAY behind inflation. According to Bank of England, the pound inflated by 724% between 1949 and 1980. Meanwhile the value per liter of whisky exports went up only 253% during the same time period. Between 1949 and 2013 the pound inflated over 2900%, and the value per liter of whisky exports went up about half that rate (around 1460%). So if one was to look at it in adjusted prices, we might be paying half of what our grandfathers did for a bottle.<br /><br />But since I picked 1980 as my starting point (since the reports often used it as a starting point), let's take a look at that. I agree with you that inflation was probably a main driver. The price per liter was up about 330% while inflation was about 260% in that time period. But oddly the former doesn't adjust at the same rate as the latter (nor had it done so historically). The two are pretty close together (1980-2006) until there's a big spike between 2007 and 2012, during the prime "boom" time. In that period, UK inflation was around 17%, whisky inflation was 44%.<br /><br />So, some thoughts (this could be its own damn post): In the period between 1980 and 2006, price per liter inflation was very close to CPI, though in the 31-year period before that it trailed CPI by a factor of three. Between 2007 and 2012, price per liter grew about 2.6x the rate of UK's CPI. It's this last period that I'm going to focus on in part two, as the US export price/liter grew by 85%, while the US CPI was 12%.<br /><br />If I can figure out how to graph some of this, I'll include it in Part 2. Thank you very much for your comment. I could actually see someone taking the stance of "The Whisky Boom as Inflation Correction" if he or she were to focus on certain blocks of years.Diving for Pearlshttps://www.blogger.com/profile/02373371259792882112noreply@blogger.comtag:blogger.com,1999:blog-3101162324715983722.post-42753558789913320362015-01-07T16:09:37.473-05:002015-01-07T16:09:37.473-05:00Looking forward to part 2!Looking forward to part 2!Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-3101162324715983722.post-58493344481320506552015-01-07T14:29:50.794-05:002015-01-07T14:29:50.794-05:00... In particular, in the second graph your are co...... In particular, in the second graph your are conflating real and nominal qualities. The graph would be better if you had real quantities only -- e.g. volume of scotch versus *real* (inflation adjusted) price of scotch. Otherwise, if you graph anything at all -- volume of pens versus price of pens -- the price of pens will be growing exponentially and will dwarf the volume changes -- it will look like your graph, but the only meaning is that we live in a world where a fixed unit of real goods cost exponentially more units of money over time.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-3101162324715983722.post-48173850970870296582015-01-07T14:25:44.242-05:002015-01-07T14:25:44.242-05:00Are you adjusting for inflation anywhere here? $1 ...Are you adjusting for inflation anywhere here? $1 of general consumption goods in 1980 costs about $3 today.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-3101162324715983722.post-65668005046756374052015-01-07T11:13:59.276-05:002015-01-07T11:13:59.276-05:00Retail alcohol sales stats for the UK: http://www....Retail alcohol sales stats for the UK: http://www.healthscotland.com/documents/24485.aspx<br /><br />There's been a general decline in the consumption of alcohol over here it seems, mostly in England and Wales. It appears we're still happy to drink ourselves to death in Scotland though :)mnemhttps://noiseandheat.comnoreply@blogger.comtag:blogger.com,1999:blog-3101162324715983722.post-60225635974906695602015-01-06T17:53:25.358-05:002015-01-06T17:53:25.358-05:00Excellent post! This is exactly what we need more ...Excellent post! This is exactly what we need more of; counters the irrational exuberance that's out there. Thanks for putting this and what's to follow together. Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-3101162324715983722.post-75373315445288349802015-01-06T17:31:12.606-05:002015-01-06T17:31:12.606-05:00Excellent and fascinating analysis!
Here's a s...Excellent and fascinating analysis!<br />Here's a second head scratcher (beyond the decline of whisky consumption in the UK): why do the aged stocks decline so rapidly, relative to the slow overall increase in volume? It would seem that what we see, besides prices rising overall (can't wait for Part 2), is a shift in the type of whisky being sold/drunk. Malt increase as proportion of whisky from 10% to 15% means a rise in malt consumption by 50%, skewing the distribution toward single malts. This should explain a part of the rise in revenues as well. More precisely, assuming that on average a single malt costs 3x a blended whisky, this shift in distribution (10% -> 15%) would lead to about 8% increase in total revenues, per liter sold. The rest up to 84% (or most of it) is from jacking up the price. But even this is hard to explain: most blended whiskies, which make the bulk of the sales, did not increase in price significantly in the past 5 years - JW Red & Black cost about the same as they did in 2009. So I simply cannot see where that 84% comes from!Florinhttps://www.blogger.com/profile/14445344658258056628noreply@blogger.comtag:blogger.com,1999:blog-3101162324715983722.post-65744613206246685922015-01-06T13:42:55.683-05:002015-01-06T13:42:55.683-05:00That decline in UK whisky consumption fascinates m...That decline in UK whisky consumption fascinates me. I wonder what the drivers are. Doubtful that it's just the price of bottles since it's been going on since at least the '80s. Lower alcohol consumption in general? More interest in imported booze?Diving for Pearlshttps://www.blogger.com/profile/02373371259792882112noreply@blogger.comtag:blogger.com,1999:blog-3101162324715983722.post-67549153776576714282015-01-06T13:35:44.384-05:002015-01-06T13:35:44.384-05:00Yeah, that's true. I guess the industry leader...Yeah, that's true. I guess the industry leaders were already speculating that there was a bigger boom to come. And while they were admiring those future markets, many of their current markets started to weaken. I don't blame Diageo for second guessing their expansion plans now, though I still think that many of their original expansion announcements were designed to excite investors.Diving for Pearlshttps://www.blogger.com/profile/02373371259792882112noreply@blogger.comtag:blogger.com,1999:blog-3101162324715983722.post-75288358587735942112015-01-06T12:45:00.373-05:002015-01-06T12:45:00.373-05:00It seems like a lot of the talk about volume incre...It seems like a lot of the talk about volume increases were predicated on the developing world, especially China and India. Since those haven't panned out, we're in the rather peculiar situation we currently find ourselves in.Jordanhttps://www.blogger.com/profile/06448702693643593156noreply@blogger.com