Want to buy an allocated bottle of whiskey?

How should retailers approach sales of limited/allocated whiskey?  And I’m speaking of truly limited bottles where demand far outpaces supply; not the stuff that Casker’s hypes like limited Whistlepig releases. Here are the 5 most common scenarios:

1. Just put it on the shelf at SRP and sell to some lucky bastard that just happens to walk in at the right time.  This is the tater’s dream and it does happen on a rare occasion.  The reality is this does not help the store to build long term profitable relationships with their customers.

2. Conduct some type of raffle/lottery system at SRP. Everybody that participates has equal shot. This does build some good will; even if you lose you at least had a chance. But taters know even these stores hold back a few bottles for their best customers.

3. Announce the release date and sell the bottles, generally 1 per person, to those who line up first.  This is the black Friday sales approach with overnight camping and it seems popular with a few big KY retailers.  Taters have taken to paying folks to line stand.

4. Stores only receive very small amounts of these allocated bottles.  It’s often based on their sales of that brand’s complete portfolio.  This may include cases of vodka or cinnamon whiskey brands they have a hard time moving.  So, they decide to make the most money they can on these allocated bottles. Stores have an idea of secondary prices and will set price even above this.  They know someone is likely to pay it; they usually do.  This approach infuriates taters.  Many seem to think this is price gouging. Whiskey is hardly a life necessity so price gouging laws do not apply.  Taters see the bottle and think they have come so close.  Of course, the only reason the bottle is still on shelf is because the price is so high. It’s capitalism, and consumers are free to take all their business elsewhere.

5.  Reserve these bottles at SRP for the best/most profitable customers. This could be a guy that buys $20,000 of wine a year but wants his bottle of Pappy once a year. Or in some states like Texas where bars/restaurants buy from retailers, this means taking care of these large volume accounts first.  Some stores a use point system that track your purchases.  In smaller stores owners are often working the floor and they know who their regular profitable customers are.

In my opinion, option 5 is by far the best approach for a store owner.   The tricky part is taters often think they are great customers of every store in town.

This covers tater reason 15.  Camp out overnight for Pappiez

Diageo responds

From my last blog post, I noted I had sent an email to Diageo’s compliance officer.  My email was forwarded to their Director of Consumer Affairs.  I received a message from him explaining the surrendered COLA.  Although the TTB initially approved the COLA, they later asked Diageo to surrender it.  Because Diageo already had product ready to go with launch events, packaging and promotional material, they came to agreement with TTB so they could use this label for period of 1 year.  They are required to be clear in any promotions or marketing material that this is not a bourbon.  After the 1-year period if they continue to sell this product, it must be under a different label and name.

So that’s the story.  I’m disappointed that the TTB approved this label to begin with.  Are they overworked or just staffed with some employees that don’t understand our laws?  I’ve seen TTB COLA label approval for low proof fruit flavor liquor that had Bottled in Bond on the label. Another time they approved a ‘whiskey’ that was distilled from potatoes.  Both of those support they don’t understand our laws.  What I suspect happened is when another big bourbon producer like Sazerac or Heaven Hill found out about this label, they contacted the TTB and pointed out why it broke our law.

This leads us to tater reason:

  1.  You purchase a crappy Canadian whiskey because you found out from Tater-Talk that it is now a limited-edition whiskey

Diageo done screwed up

In this industry one of the things I am known for is pointing out producers when they violate TTB federal labeling laws on spirits.  I do so as a consumer advocate.  Prior to 2007 there were about a dozen companies producing whiskey in the US.  Per the American Craft Spirits association as of 2017 there are now 1589 craft distillers in the US.  When a distiller wants to create a new label, they submit a COLA application for approval to the TTB.  Under penalty of perjury, they swear that the label meets all US labeling laws.  Now one might think that the TTB would know all these laws and only approve labels that met them, but that have proven time and time again that don’t.  I however have studied our labeling laws extensively and know them inside out.

Almost all of the labeling mistakes I see are from these newer small craft producers.  Often it is an honest mistake in that they were not aware of a particular portion of the law.  I have pointed out mistakes and had many appreciate it and update their label accordingly.  Others violate label law on purpose because to follow them would mean telling their potential customers more than they want to and potentially hurt their sales.  I rarely see mistakes from the big producers because I suspect they have teams of lawyers that review these labels and know the laws. So that brings us to Diageo, the world’s largest spirit company.

One of Diageo’s brands is Crown Royal.  Crown is introducing a new product in the US called Crown Royal Bourbon Mash Blended Canadian Whiskey.  It’s imported from Canada.  Bourbon is red hot these days so I can see why Crown Royal wants to jump on the Bourbon bandwagon.  The problem is they broke the law in doing so.  Bourbon is distinctive product of the US as declared by the US congress in 1964 and signed by President Lyndon B Johnson.  NAFTA contains a section where Canada agreed to recognize Bourbon Whiskey as a distinctive product of the US.  American law is found in 27 CFR 5.22 (b) (2) – ‘Whiskey distilled from bourbon mash produced in the United States’.

27 CFR 5.22 (l) (1) is the smoking gun.  It states That the word “bourbon” shall not be used to describe any whisky or whisky-based distilled spirits not produced in the United States.  This is exactly what Diageo did.  They used Bourbon to describe a product that was produced in Canada.

Here is their COLA approval – CR Bourbon Mash Label  In my state Texas, it is required to have state approval as well.  Here is their Texas approval – CR Bourbon Mash TX approval PDF  If you notice the Texas approval was approved Jan 04, 2018 and is based off the Federal COLA approval #17206001000359.

This label should have never been approved by the TTB. It should have never even been submitted by Diageo.  And now it gets even more interesting.  This label status is now ‘surrendered’, which means it is no longer valid – picture of this CR label surrendered

When the label was surrendered is unknown.  I have searched the TTB database extensively and I have not found any replacement COLA approval.  Yet, Diageo is continuing to sell this product.  There is even a launch party for it tonight in Houston.

Diageo is the 900 lb gorilla in the room in the spirits business.  Maybe they think they are too big for the law to apply to them.  I for one will call them out on their shenanigans when appropriate.

Update – Diageo’s compliance officer name was on the original COLA label application, so I sent her an email asking about this.  Screenshot of email here email to Diageo

Blind Tasting of 20 American Whiskies

I love blind tastings.  I think too often we get caught up in trap of if something is expensive it must be excellent.  I just finished up running a blind tasting of 20 American whiskies. I obtained 20 different bottles of American Whiskey and broke each one down into 50 ml sample bottles.  In a local Houston whiskey group, I had 15 tasters volunteer.  Each taster paid the actual cost for the samples.  The only 2 clues the tasters knew were that it was American whiskey and that none were secondary cask finished products.  They submitted notes and scores on 2 samples a week for 10 weeks.

American Whiskey is a broad category.  The TTB defines 35 different types.  And I threw the gauntlet at this group; corn whiskey, wheat whiskey, Bourbon, malt, rye, blend of straight whiskey, and even one that was 51% American and 49% Canadian.  I Included whiskies that ranged from $15 to $130.  Included were some hot to trot new brands that are often discussed in social media.  I threw in a real dog, well OK a few, and the group pretty much ranked this appropriately towards the bottom

The attached graph (data graph courtesy of Sergio Garcia) shows the results.  The scores on the 2 most expensive whiskies? slightly above middle of the pack.  Maker’s Mark Cask Strength as winner might surprise some, but not me.  I think the entire line of Maker’s products are under appreciated by whiskey geeks and hope this will get a few to go pick up a bottle.  Whitmeyer’s is a local Houston area craft distillery.  They have just started selling some of their true grain to glass bourbon as single barrel expressions so nice to see them score so high.

One I really enjoyed but the tasters thought middle of the pack was the new Beam Little Book, a blend of straight whiskey.  It was probably the most polarizing of the group.  If you look at it’s median score and top range, it way outperformed its average score.

HBS Blind #2 ranks graph 2

For larger image of graph, see here:  Blind 20 graph

Private picks vs store picks

I have been involved with barrel picks from multiple distilleries: Wild Turkey, Jim Beam, Four Roses, Buffalo Trace, Willett, Bowman, Smooth Ambler, High West, MB Roland.  One thing they all have in common is you are almost always picking someone else’s reject barrels.  Let me explain.  The typical process is samples will be sent or if in person barrels rolled out.  It varies but typically from 5 to 10 barrel samples are tasted for your pick.  The barrel you select is then marked and set aside for later bottling.  A new barrel is rolled in and the next group gets in on the process, picking from your reject barrels, just as you picked from the prior group’s reject barrels.

When you walk into a liquor store and see a private pick of a bottle on the shelf, sometimes the store owner/manager was directly involved in the pick by tasting samples.  But plenty of times it is nothing more that the store telling the distillery to send them a barrel pick of xyz.  In this case, someone at the distillery selects the barrel. Pulling and moving barrels from a rickhouse is lot of hard work; I’ve moved my share.  Since barrels have already been pulled for the barrel picks, my theory is if a barrel has been rejected multiple times by groups doing tastings, those are the barrels that become ‘store’ picks.

As they say one man’s trash is another man’s treasure.

Whiskey Tater Reason:

51. You believe all barrel picks are superior to standard bottle expression.


Whiskey Water?

There are companies that now market special limestone water for mixing with your bourbon.  They claim it’s the same water Kentucky distillers us to make bourbon.  This might be true, but they omit the most important detail.

KY distillers use this limestone water only in the cooking of the mash and fermentation, never in the bottling.   Limestone water is naturally low and iron and sulfur, both of those you don’t want in distillation.   Limestone water also has magnesium and calcium which can act as nutrients for yeast during the fermentation process.

Limestone water is hardly unique to KY.  Large limestone aquifers exist throughout the Southwest into Minnesota and Iowa and down to Florida.

Post distillation, all water used in the bourbon making process by any of the major producers is a pure as possible.  The water is treated by reverse osmosis and deionization or other similar process to be as neutral as possible.  No distillery would even consider using limestone water post distillation.  No limestone water is used to cut white dog to barrel entry proof nor is it used to cut to bottle proof.  Yet, companies want to sell you this special water for you to add to your bourbon.

The only reason you would buy this water is if you are tater.  Specifically, tater reason #

33. Buy specialty ‘whiskey water’ to add to your whiskey vs tap or routinely available bottled water.

Kentucky Bound

I’m leaving first thing in morning for a KY trip.  I made my first trip there in 2003 or maybe 2004; can’t recall exactly.  And since then most years I’ve been once or twice a year.  This trip I’m going as representative from local Houston Bourbon group and helping select a couple of barrels for the group to enjoy.  Our first stop will be at Four Roses.  I’m lucky enough to have done this more than once.  It’s a fantastic experience.  Last time I was there picking a barrel, one of the best in the industry, Jim Rutledge, was there.  Jim would walk you through the process, hand pulling samples from the barrels.

We will also be making trip over to MB Roland.  I visited them once before about 4 years ago when they were just getting going.  They were doing some stuff I thought was fascinating; distilling to only 100 proof and placing that straight into barrel.  Nobody has done that in 50 years.   I have not tried any of their whiskey since that visit, so looking forward to seeing how that turned out.

Even more important for me is who I will be making trip with.  Along are a couple of longtime whiskey friends and a couple of newer ones.  Really looking forward to just hanging out with these guys for a few days.  Also, will get a chance to see a couple of good friends that live in KY.   It’s going to be freezing, but so worth it.