“I see FarmStock 001 being a $10,000 bottle of whiskey within 10 years,” says Raj Bhakta. It’s a bold predictionfrom the founder of pioneering craft distillery WhistlePig, especially given that FarmStock 001 is the company’s first offering to include whiskey actually distilled at WhistlePig’s picturesque Vermont farm. Bhakta, however, has good reason for his optimism. The most recent release from WhistlePig, Boss Hog The Black Prince, a rye finished in Armagnac casks, launched last fall and retails for $500 a bottle—an unheard-of price for a craft upstart.
The Black Prince has beaten out competition from Scotland, Ireland, Kentucky, and Japan to win a slew of awards, including the Best Whiskey in Show award from the San Francisco World Spirits Competition. Bhakta and others believe that Boss Hog is not an outlier or a flash in the pan, but the beginning of something new. Not just for drinking anymore, American whiskey has achieved investment grade.
Today, with only a few exceptions, American whiskey rarely sells for over a thousand dollars—not in stores and not at auction. Contrast that with the six decanters of the Macallan in Lalique Legacy Collection that sold for over $800,000 at auction earlier this year. But that doesn’t mean Bhakta’s five-digit target is pure bluster. “Let me put it in very clear terms,” says Bhakta. “There is a 100 percent certainty that American whiskeys will replace both Scotch and Japanese whiskies as the preeminent whiskeys of the world. Like most revolutions, it’ll look like it happened in an instant, but it’ll be decades in the making.”
American whiskey is the odd dram out in the elite auction houses of London, New York, and Hong Kong. Scotch historically has dominated the auction markets, matched only by Japanese whisky in recent years. Indeed, Japanese whisky held the record for a single, standard-sized bottle at over $140,000 for Karuizawa 1960. Yet just a small handful of American whiskey bottles have broken the five-figure barrier at auction.
This disparity has deep roots. Scotch has long been highly coveted, but until recently bourbon was an old man’s drink: inexpensive and unfashionable, certainly not a luxury good. It takes time to dig out of a hole like that. “The market for well-aged, older American whiskeys has really not been around in a big way until recently,” says Joe Magliocco, president of Michter’s Distillery. Moreover, American whiskey was never as well-known abroad as Scotch single malt, but rising exports are changing that. In the oil-rich city of Calgary, the largest independent retailer in Canada—Willow Park Wines & Spirits—caters to a high-end collecting audience. Whisky buyer David Michiels once plied local oilmen with top-notch scotch, but now he sees increasing interest in aged bourbon. Collectors who have largely been priced out of luxury single malts are now buying American. “The market is strong, and it just keeps on getting stronger,” Michiels says. “Collectors are trying to find things before they get publicized and more public. This is just the beginning.”
Great scotches are fantastic, but when you make a really great American whiskey, that can rival anything. —Joe Magliocco, Michter’s Distillery
The most obvious place for an American whiskey collecting culture to thrive is in the spirit’s home country, but the legacy of Prohibition has stymied an open trade in whisky in the United States. “There are added complications in America in regard to different state laws, in terms of buying whiskey and where it can be bought and sold,” says Noah May, wine and rare spirits specialist at Christie’s auction house in New York. “It’s a little easier for the market to grow and flourish in Europe.” A few auction houses offer spirits auctions, but even now they’re infrequent, and there’s nothing comparable to the ease of Europe’s online whisky auctions. Still, there are signs of progress, most notably with the 2017 passage of Kentucky bill HB 100, which will allow consumers to legally sell vintage spirits to bars, restaurants, and retailers beginning January 1st, 2018.
Japanese whisky, today’s auction darling, offers a road map for American whiskey’s future. Japanese whisky long lingered under the radar outside of Japan, but a combination of press accolades and an enduring commitment to quality ignited a fervor for rare Japanese bottlings. To the outside observer, Japanese whisky became collectible nearly overnight. With its high quality, Japanese whisky had been poised to become truly collectible for years. It just lacked a spark, which came in the form of a concentrated burst of press accolades a few years ago. Japanese whiskies have embraced their newfound fame, allowing for artisan releases like Yamazaki Mizunara Cask ($1,000 for the 2017 edition). A similar flashpoint for American whiskey is near. Given the right spark, something to draw worldwide collector attention, there will be no containing the explosion.
Rising prices are the undisputed indicator of increasing collectability. Black Bowmore, a landmark series that acted as a catalyst for luxury single malt scotch, cost only $500 on its initial release in 1993—the same price as The Black Prince. The secondary market valued it much higher, and eventually owners Morrison Bowmore took notice, raising their price to $4,500 in 2004 and $25,000 for 2017. (Granted, the whisky is much older now.) Other producers, notably Diageo for its Special Releases line, quickly followed suit. Unlike the Scots, bourbon producers have thus far mostly declined to raise their retail prices to match the prevailing market price, contributing to a thriving secondary market. “The producers themselves are leaving that spread in there,” says Brett Pontoni, spirits buyer at Binny’s Beverage Depot in Illinois. “They’re not adjusting their costs to reflect the auction market.”
Some American producers are motivated to raise prices precisely as a statement about our native whiskey’s value. “When we released Michter’s Celebration in 2013, [master distiller] Willie Pratt and I saw that great scotches were being sold at tremendous premiums to great American whiskeys,” Magliocco says. “Great scotches are fantastic, but when you make a really great American whiskey, that can rival anything. We were the first ones to stick our neck out there and do something really, really special at a collectible price.” The initial release of Celebration, a blend of Kentucky straight bourbon and rye, some of it more than 30 years old, ran for $3,000 to $4,000 a bottle, and the 2016 release, which scored a 94 in the Whisky Advocate Buying Guide, jumped to $5,000. The head-turning price alone may encourage collectors to find a place for it on their shelf next to the latest Dalmore, Highland Park, or Yamazaki.
I think if any of the new craft distilleries produce an exceptional whiskey in limited quantities and it receives some good press, it will be a valuable collectible. —Julian Van Winkle, Old Rip Van Winkle
Even the highly coveted Old Rip Van Winkle and Pappy Van Winkle whiskeys, probably the most sought-after luxury bourbons in the world, have only increased retail prices modestly for existing whiskeys. Pappy Van Winkle 23 year old remains at just $270, while this summer Old Rip Van Winkle 25 year old joined the fold priced at $1,800.
The Next Pappy Is Pappy
Pappy Van Winkle is almost certainly the most collectible bourbon currently in production, and the extreme demand, lack of supply, and high secondary market prices have sent many forward-looking collectors on a quest to discover “the next Pappy” before everybody else does. Spoiler alert: the next Pappy is…Pappy. The bourbons that are already collectible today will be even more collectible tomorrow. They’re hard to find, expensive, and generally very high quality. With an ever-greater number of drinkers vying for the Buffalo Trace Antique Collection, Old Forester Birthday Bourbon, Four Roses Limited Edition, and Parker’s Heritage Collection, these whiskeys will almost invariably continue to increase in value. Flagship releases from long-established American whiskey distilleries with stellar reputations are no more likely to go out of fashion than the most collectible scotch distilleries—Macallan, Ardbeg, Port Ellen—with the older whiskies that collectors covet. “Older whiskies and specialty bottlings are what’s popular and collectible now,” says Julian Van Winkle, president of Old Rip Van Winkle. “Now that the American distilleries are producing older whiskeys and more single barrel offerings, along with different barrel finishes, the gap between Scotch, Japanese and American whiskeys will narrow in the collectible category.”
While some collectors eagerly await the appearance of more luxury and limited bottles, others are looking toward the past, to historic American whiskey. “The connoisseur opportunity for collectors to acquire bottles with great age, including pre-Prohibition whiskey, is quite a big part of the marketplace,” says May of Christie’s. “I would say that that’s probably where the highest level of interest and value lies at auction.”
Many other whiskies will join the ranks of American whiskey’s giants in the years ahead. Consider that some of today’s most prized whiskies—Port Ellen, A.H. Hirsch, Stitzel-Weller—were neglected in their own time. Eager modern collectors should ask themselves, “Which whiskies are underappreciated right now?” The answer makes a compelling case for contemporary craft whiskey, which is still in its infancy. “I think if any of the new craft distilleries produce an exceptional whiskey in limited quantities and it receives some good press, it will be a valuable collectible,” says Van Winkle.
But such untested whiskeys face hurdles with collectors. “The new craft folks are still young and not yet up to ‘collection worthy’ spirits,” says Colin Keegan, owner and distiller at Santa Fe Spirits in New Mexico. Their whiskeys, in most cases, simply need more time, but their commitment to a craft ethos and experimentation gives them a boost. Brian Prewitt, master distiller at A. Smith Bowman in Virginia, thinks that, “The extreme attention to detail and the opportunity to express more terroir may help to bring some small craft whiskeys to collectible status faster than some larger offerings, but the whiskey that the distillery produces will have to continue to impress year after year. Just because something is produced in exceptionally small batches does not make it exceptional.”
There already is collectible craft whiskey. I see our bottles collected, albeit at lower values, and have seen some stuff pop up on auctions. —Paul Hletko, FEW Spirits
The truth is, craft whiskey is already becoming collectible. “There already is collectible craft whiskey. It may not be as widespread, but it’s there,” says Paul Hletko, founder of FEW Spirits in Evanston, Illinois. “I see our bottles collected, albeit at lower values, and have even seen some stuff pop up on auctions.” Robert Likarish, co-founder and head distiller at Ironroot Republic in Texas, says, “There are definitely craft whiskeys out there that are already starting to become collectible. When Stranahan’s releases its Snowflake release once a year, people wait in lines for hours if not overnight just to get a bottle.”
Limited-edition craft whiskey series, which may never be made in the same way again, are likely to attract future collectors who are eager to see a distillery’s style in its early days. Annual releases like Westland’s Garryana series, partially aged in oak native to the Pacific Northwest; Four Kings, a collaborative bottling from FEW and other distillers; the St. George Lot series; and WhistlePig’s FarmStock range will all evolve with each release. “People will try to build verticals,” Pontoni says. “There are people collecting Westland Garryana, but it hasn’t been a groundswell yet. However, when Garryana three, four, five start rolling out, there’s going to be more activity trying to go back to the originals, and that’s when there’s more value in the set than a la carte.” And collectors should think big. “Imagine the value of having FarmStock 001 through 006 in 20 years, when Whistlepig is as big and prestigious as Macallan. That is primo collector territory,” says Bhakta.
Bourbon’s Gilded Age
American whiskey is on the path toward greater collectibility and higher prices, but be careful what you wish for; there are downsides to collectability. Look at Bordeaux, where outrageous pricing has driven away a whole generation of American drinkers, and Napa Cabernet, which is also struggling to reach millennials who can’t afford it. Bourbon has long been a drink for everyone, but if prices go too high, that will change. “When the prices get that high, nobody ends up drinking it,” Pontoni of Binny’s says. Luxury scotch in crystal decanters priced at five figures is aimed at patrician collectors, not actual whisky drinkers. At the top end of the luxury wine and spirits markets, bottles trade hands for ever-higher prices without ever being opened and enjoyed. “You might as well be buying a Van Gogh,” Pontoni says. “At least if you buy a piece of art, you can look at it. But I don’t think anybody that makes whisky is putting it in a bottle so people can just look at it.” So, if you buy FarmStock or Snowflake or even Pappy Van Winkle, make sure you buy two bottles and taste one—no matter how much that whiskey appreciates, its primary purpose is for you to drink it and enjoy it.